Correlation Between Outset Medical and Centene Corp
Can any of the company-specific risk be diversified away by investing in both Outset Medical and Centene Corp at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Outset Medical and Centene Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Outset Medical and Centene Corp, you can compare the effects of market volatilities on Outset Medical and Centene Corp and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Outset Medical with a short position of Centene Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outset Medical and Centene Corp.
Diversification Opportunities for Outset Medical and Centene Corp
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Outset and Centene is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Outset Medical and Centene Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centene Corp and Outset Medical is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Outset Medical are associated (or correlated) with Centene Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centene Corp has no effect on the direction of Outset Medical i.e., Outset Medical and Centene Corp go up and down completely randomly.
Pair Corralation between Outset Medical and Centene Corp
Allowing for the 90-day total investment horizon Outset Medical is expected to under-perform the Centene Corp. In addition to that, Outset Medical is 4.29 times more volatile than Centene Corp. It trades about -0.02 of its total potential returns per unit of risk. Centene Corp is currently generating about -0.06 per unit of volatility. If you would invest 7,843 in Centene Corp on August 27, 2024 and sell it today you would lose (1,806) from holding Centene Corp or give up 23.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Outset Medical vs. Centene Corp
Performance |
| Timeline |
| Outset Medical |
| Centene Corp |
Outset Medical and Centene Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Outset Medical and Centene Corp
The main advantage of trading using opposite Outset Medical and Centene Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Outset Medical position performs unexpectedly, Centene Corp can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Centene Corp will offset losses from the drop in Centene Corp's long position.| Outset Medical vs. Inari Medical | Outset Medical vs. Clearpoint Neuro | Outset Medical vs. Inspire Medical Systems | Outset Medical vs. Nevro Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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