Correlation Between Centene Corp and Ford
Can any of the company-specific risk be diversified away by investing in both Centene Corp and Ford 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 Centene Corp and Ford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centene Corp and Ford Motor, you can compare the effects of market volatilities on Centene Corp and Ford 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 Centene Corp with a short position of Ford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centene Corp and Ford.
Diversification Opportunities for Centene Corp and Ford
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Centene and Ford is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Centene Corp and Ford Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ford Motor and Centene Corp 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 Centene Corp are associated (or correlated) with Ford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ford Motor has no effect on the direction of Centene Corp i.e., Centene Corp and Ford go up and down completely randomly.
Pair Corralation between Centene Corp and Ford
Considering the 90-day investment horizon Centene Corp is expected to generate 0.84 times more return on investment than Ford. However, Centene Corp is 1.19 times less risky than Ford. It trades about -0.13 of its potential returns per unit of risk. Ford Motor is currently generating about -0.14 per unit of risk. If you would invest 7,788 in Centene Corp on January 20, 2024 and sell it today you would lose (413.00) from holding Centene Corp or give up 5.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Centene Corp vs. Ford Motor
Performance |
| Timeline |
| Centene Corp |
| Ford Motor |
Centene Corp and Ford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centene Corp and Ford
The main advantage of trading using opposite Centene Corp and Ford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centene Corp position performs unexpectedly, Ford 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 Ford will offset losses from the drop in Ford's long position.| Centene Corp vs. Certara | Centene Corp vs. HealthStream | Centene Corp vs. Evolent Health | Centene Corp vs. Streamline Health Solutions |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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