Correlation Between Beyond Air and Centene Corp

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

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

Diversification Opportunities for Beyond Air and Centene Corp

0.44

Correlation Coefficient

Beyond Air  Centene Corp

Very weak diversification

The 3 months correlation between Beyond and Centene is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Beyond Air and Centene Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centene Corp and Beyond Air 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 Beyond Air 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 Beyond Air i.e., Beyond Air and Centene Corp go up and down completely randomly.

Pair Corralation between Beyond Air and Centene Corp

Given the investment horizon of 90 days Beyond Air is expected to under-perform the Centene Corp. In addition to that, Beyond Air is 2.86 times more volatile than Centene Corp. It trades about -0.07 of its total potential returns per unit of risk. Centene Corp is currently generating about 0.01 per unit of volatility. If you would invest  6,036  in Centene Corp on December 28, 2024 and sell it today you would lose (32.00) from holding Centene Corp or give up 0.53% of portfolio value over 90 days.

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

Beyond Air  vs.  Centene Corp

Beyond Air

Risk-Adjusted Performance

Very Weak

Over the last 90 days Beyond Air has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's forward indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Centene Corp

Risk-Adjusted Performance

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 rather sound basic indicators, Centene Corp is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Beyond Air and Centene Corp

The main advantage of trading using opposite Beyond Air and Centene Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beyond Air 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 Beyond Air 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.