Correlation Between GoHealth and Boston Omaha

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

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

Diversification Opportunities for GoHealth and Boston Omaha

0.71

Correlation Coefficient

GoHealth  Boston Omaha

Poor diversification

The 3 months correlation between GoHealth and Boston is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding GoHealth and Boston Omaha Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Omaha Corp and GoHealth 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 GoHealth are associated (or correlated) with Boston Omaha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Omaha Corp has no effect on the direction of GoHealth i.e., GoHealth and Boston Omaha go up and down completely randomly.

Pair Corralation between GoHealth and Boston Omaha

Given the investment horizon of 90 days GoHealth is expected to generate 2.8 times more return on investment than Boston Omaha. However, GoHealth is 2.8 times more volatile than Boston Omaha Corp. It trades about 0.19 of its potential returns per unit of risk. Boston Omaha Corp is currently generating about 0.1 per unit of risk. If you would invest  839.00  in GoHealth on September 3, 2024 and sell it today you would earn a total of  442.00  from holding GoHealth or generate 52.68% return on investment over 90 days.

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

GoHealth  vs.  Boston Omaha Corp

GoHealth

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GoHealth are ranked lower than 14 (%) 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.

Boston Omaha Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Boston Omaha Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Boston Omaha may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with GoHealth and Boston Omaha

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

The idea behind GoHealth and Boston Omaha Corp 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.