Correlation Between Centene Corp and Magellan Health
Can any of the company-specific risk be diversified away by investing in both Centene Corp and Magellan Health 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 Magellan Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centene Corp and Magellan Health, you can compare the effects of market volatilities on Centene Corp and Magellan Health 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 Magellan Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centene Corp and Magellan Health.
Diversification Opportunities for Centene Corp and Magellan Health
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Centene and Magellan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Centene Corp and Magellan Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magellan Health 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 Magellan Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magellan Health has no effect on the direction of Centene Corp i.e., Centene Corp and Magellan Health go up and down completely randomly.
Pair Corralation between Centene Corp and Magellan Health
If you would invest (100.00) in Magellan Health on January 20, 2024 and sell it today you would earn a total of 100.00 from holding Magellan Health or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Centene Corp vs. Magellan Health
Performance |
| Timeline |
| Centene Corp |
| Magellan Health |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Centene Corp and Magellan Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centene Corp and Magellan Health
The main advantage of trading using opposite Centene Corp and Magellan Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centene Corp position performs unexpectedly, Magellan Health 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 Magellan Health will offset losses from the drop in Magellan Health's long position.| Centene Corp vs. Certara | Centene Corp vs. HealthStream | Centene Corp vs. Evolent Health | Centene Corp vs. Streamline Health Solutions |
| Magellan Health vs. Summit Materials | Magellan Health vs. Aerofoam Metals | Magellan Health vs. Highway Holdings Limited | Magellan Health vs. Mangazeya Mining |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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