Correlation Between Veeva Systems and Centene Corp

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

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

Diversification Opportunities for Veeva Systems and Centene Corp

-0.46

Correlation Coefficient

Veeva Systems  Centene Corp

Very good diversification

The 3 months correlation between Veeva and Centene is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Veeva Systems Class and Centene Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centene Corp and Veeva Systems 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 Veeva Systems Class are associated (or correlated) with Centene Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centene Corp has no effect on the direction of Veeva Systems i.e., Veeva Systems and Centene Corp go up and down completely randomly.

Pair Corralation between Veeva Systems and Centene Corp

Given the investment horizon of 90 days Veeva Systems Class is expected to generate 0.74 times more return on investment than Centene Corp. However, Veeva Systems Class is 1.35 times less risky than Centene Corp. It trades about 0.06 of its potential returns per unit of risk. Centene Corp is currently generating about -0.18 per unit of risk. If you would invest  21,574  in Veeva Systems Class on September 1, 2024 and sell it today you would earn a total of  1,211  from holding Veeva Systems Class or generate 5.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Veeva Systems Class  vs.  Centene Corp

Veeva Systems Class

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Veeva Systems Class are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Veeva Systems may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Centene Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Centene Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Veeva Systems and Centene Corp

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

The idea behind Veeva Systems Class and Centene 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.