Correlation Between WellCare Health and LifePoint Health
Can any of the company-specific risk be diversified away by investing in both WellCare Health and LifePoint 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 WellCare Health and LifePoint Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WellCare Health Plans and LifePoint Health, you can compare the effects of market volatilities on WellCare Health and LifePoint 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 WellCare Health with a short position of LifePoint Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of WellCare Health and LifePoint Health.
Diversification Opportunities for WellCare Health and LifePoint Health
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between WellCare and LifePoint is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding WellCare Health Plans and LifePoint Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LifePoint Health and WellCare Health 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 WellCare Health Plans are associated (or correlated) with LifePoint Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LifePoint Health has no effect on the direction of WellCare Health i.e., WellCare Health and LifePoint Health go up and down completely randomly.
Pair Corralation between WellCare Health and LifePoint Health
If you would invest (100.00) in LifePoint Health on February 5, 2024 and sell it today you would earn a total of 100.00 from holding LifePoint Health or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WellCare Health Plans vs. LifePoint Health
Performance |
| Timeline |
| WellCare Health Plans |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| LifePoint Health |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
WellCare Health and LifePoint Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WellCare Health and LifePoint Health
The main advantage of trading using opposite WellCare Health and LifePoint Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WellCare Health position performs unexpectedly, LifePoint 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 LifePoint Health will offset losses from the drop in LifePoint Health's long position.| WellCare Health vs. FTAI Aviation Ltd | WellCare Health vs. Loandepot | WellCare Health vs. Keurig Dr Pepper | WellCare Health vs. Diageo PLC ADR |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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