Correlation Between Centene Corp and Anthem

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Centene Corp and Anthem 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 Corp and Anthem into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centene Corp and Anthem Inc, you can compare the effects of market volatilities on Centene Corp and Anthem 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 Corp with a short position of Anthem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centene Corp and Anthem.

Diversification Opportunities for Centene Corp and Anthem

-0.61
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Centene and Anthem is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Centene Corp and Anthem Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anthem Inc and Centene Corp 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 Corp are associated (or correlated) with Anthem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anthem Inc has no effect on the direction of Centene Corp i.e., Centene Corp and Anthem go up and down completely randomly.

Pair Corralation between Centene Corp and Anthem

If you would invest  9,016  in Centene Corp on May 21, 2022 and sell it today you would earn a total of  674.00  from holding Centene Corp or generate 7.48% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy4.35%
ValuesDaily Returns

Centene Corp  vs.  Anthem Inc

 Performance (%) 
       Timeline  
Centene Corp 
Centene Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Centene Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Centene Corp sustained solid returns over the last few months and may actually be approaching a breakup point.

Centene Price Channel

Anthem Inc 
Anthem Performance
0 of 100
Over the last 90 days Anthem Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady basic indicators, Anthem is not utilizing all of its potentials. The new stock price chaos, may contribute to medium-term losses for the stakeholders.

Centene Corp and Anthem Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Centene Corp and Anthem

The main advantage of trading using opposite Centene Corp and Anthem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centene Corp position performs unexpectedly, Anthem 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 Anthem will offset losses from the drop in Anthem's long position.
The idea behind Centene Corp and Anthem 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.
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

Other Complementary Tools

Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Go
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Go
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Go
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Go
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Go