Correlation Between China Finance and GoHealth

Can any of the company-specific risk be diversified away by investing in both China Finance and GoHealth 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 China Finance and GoHealth into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between China Finance and GoHealth, you can compare the effects of market volatilities on China Finance and GoHealth 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 China Finance with a short position of GoHealth. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Finance and GoHealth.

Diversification Opportunities for China Finance and GoHealth

0.0

Correlation Coefficient

China Finance  GoHealth

Pay attention - limited upside

The 3 months correlation between China and GoHealth is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Finance and GoHealth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoHealth and China Finance 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 China Finance are associated (or correlated) with GoHealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoHealth has no effect on the direction of China Finance i.e., China Finance and GoHealth go up and down completely randomly.

Pair Corralation between China Finance and GoHealth

If you would invest  975.00  in GoHealth on September 12, 2024 and sell it today you would earn a total of  155.00  from holding GoHealth or generate 15.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.2%
Values	Daily Returns

China Finance  vs.  GoHealth

China Finance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days China Finance has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, China Finance is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

GoHealth

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GoHealth are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent fundamental indicators, GoHealth displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with China Finance and GoHealth

The main advantage of trading using opposite China Finance and GoHealth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Finance position performs unexpectedly, GoHealth 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 GoHealth will offset losses from the drop in GoHealth's long position.

The idea behind China Finance and GoHealth pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.