Correlation Between Elevance Health and Cencora
Can any of the company-specific risk be diversified away by investing in both Elevance Health and Cencora 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 Elevance Health and Cencora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elevance Health and Cencora, you can compare the effects of market volatilities on Elevance Health and Cencora 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 Elevance Health with a short position of Cencora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elevance Health and Cencora.
Diversification Opportunities for Elevance Health and Cencora
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Elevance and Cencora is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Elevance Health and Cencora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cencora and Elevance 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 Elevance Health are associated (or correlated) with Cencora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cencora has no effect on the direction of Elevance Health i.e., Elevance Health and Cencora go up and down completely randomly.
Pair Corralation between Elevance Health and Cencora
Considering the 90-day investment horizon Elevance Health is expected to under-perform the Cencora. But the stock apears to be less risky and, when comparing its historical volatility, Elevance Health is 1.04 times less risky than Cencora. The stock trades about -0.14 of its potential returns per unit of risk. The Cencora is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 23,346 in Cencora on September 6, 2024 and sell it today you would earn a total of 1,488 from holding Cencora or generate 6.37% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Elevance Health vs. Cencora
Performance |
Timeline |
Elevance Health |
Cencora |
Elevance Health and Cencora Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Elevance Health and Cencora
The main advantage of trading using opposite Elevance Health and Cencora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elevance Health position performs unexpectedly, Cencora 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 Cencora will offset losses from the drop in Cencora's long position.Elevance Health vs. Cigna Corp | Elevance Health vs. UnitedHealth Group Incorporated | Elevance Health vs. Centene Corp | Elevance Health vs. Molina Healthcare |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume |