Correlation Between Centene and Allient

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

By analyzing existing cross correlation between Centene 4625 percent and Allient, you can compare the effects of market volatilities on Centene and Allient 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 Centene with a short position of Allient. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centene and Allient.

Diversification Opportunities for Centene and Allient

-0.32

Correlation Coefficient

Centene  Allient

Very good diversification

The 3 months correlation between Centene and Allient is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Centene 4625 percent and Allient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allient and Centene 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 Centene 4625 percent are associated (or correlated) with Allient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allient has no effect on the direction of Centene i.e., Centene and Allient go up and down completely randomly.

Pair Corralation between Centene and Allient

Assuming the 90 days trading horizon Centene 4625 percent is expected to generate 0.21 times more return on investment than Allient. However, Centene 4625 percent is 4.85 times less risky than Allient. It trades about 0.0 of its potential returns per unit of risk. Allient is currently generating about -0.02 per unit of risk. If you would invest  9,489  in Centene 4625 percent on October 11, 2024 and sell it today you would lose (76.00) from holding Centene 4625 percent or give up 0.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Centene 4625 percent  vs.  Allient

Centene 4625 percent

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Centene 4625 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Centene is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Allient

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Allient are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Allient unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Centene and Allient

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

The idea behind Centene 4625 percent and Allient 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.