Correlation Between Elevance Health and Mednax

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Can any of the company-specific risk be diversified away by investing in both Elevance Health and Mednax 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 Mednax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elevance Health and Mednax Inc, you can compare the effects of market volatilities on Elevance Health and Mednax 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 Mednax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elevance Health and Mednax.

Diversification Opportunities for Elevance Health and Mednax

-0.87
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Elevance and Mednax is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Elevance Health and Mednax Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mednax Inc 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 Mednax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mednax Inc has no effect on the direction of Elevance Health i.e., Elevance Health and Mednax go up and down completely randomly.

Pair Corralation between Elevance Health and Mednax

Considering the 90-day investment horizon Elevance Health is expected to under-perform the Mednax. But the stock apears to be less risky and, when comparing its historical volatility, Elevance Health is 1.89 times less risky than Mednax. The stock trades about -0.24 of its potential returns per unit of risk. The Mednax Inc is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,074  in Mednax Inc on September 5, 2024 and sell it today you would earn a total of  415.00  from holding Mednax Inc or generate 38.64% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Elevance Health  vs.  Mednax Inc

 Performance 
       Timeline  
Elevance Health 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Elevance Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's essential indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.
Mednax Inc 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Mednax Inc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Mednax exhibited solid returns over the last few months and may actually be approaching a breakup point.

Elevance Health and Mednax Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Elevance Health and Mednax

The main advantage of trading using opposite Elevance Health and Mednax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elevance Health position performs unexpectedly, Mednax 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 Mednax will offset losses from the drop in Mednax's long position.
The idea behind Elevance Health and Mednax Inc 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.

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