Correlation Between Crawford and GoHealth

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

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

Diversification Opportunities for Crawford and GoHealth

0.61

Correlation Coefficient

Crawford  GoHealth

Poor diversification

The 3 months correlation between Crawford and GoHealth is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Crawford Company and GoHealth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoHealth and Crawford 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 Crawford Company 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 Crawford i.e., Crawford and GoHealth go up and down completely randomly.

Pair Corralation between Crawford and GoHealth

Assuming the 90 days horizon Crawford is expected to generate 10.09 times less return on investment than GoHealth. But when comparing it to its historical volatility, Crawford Company is 2.66 times less risky than GoHealth. It trades about 0.0 of its potential returns per unit of risk. GoHealth is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,280  in GoHealth on December 30, 2024 and sell it today you would lose (42.00) from holding GoHealth or give up 3.28% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Crawford Company  vs.  GoHealth

Crawford

Risk-Adjusted Performance

Very Weak

Over the last 90 days Crawford Company has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Crawford is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

GoHealth

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GoHealth are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, GoHealth is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Crawford and GoHealth

The main advantage of trading using opposite Crawford and GoHealth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crawford 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 Crawford Company 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.

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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.