Correlation Between Anthem and Magellan Health
Can any of the company-specific risk be diversified away by investing in both Anthem and Magellan Health 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 Anthem and Magellan Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anthem Inc and Magellan Health, you can compare the effects of market volatilities on Anthem and Magellan Health 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 Anthem with a short position of Magellan Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anthem and Magellan Health.
Diversification Opportunities for Anthem and Magellan Health
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Anthem and Magellan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Anthem Inc and Magellan Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magellan Health and Anthem 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 Anthem Inc are associated (or correlated) with Magellan Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magellan Health has no effect on the direction of Anthem i.e., Anthem and Magellan Health go up and down completely randomly.
Pair Corralation between Anthem and Magellan Health
If you would invest (100.00) in Magellan Health on January 30, 2024 and sell it today you would earn a total of 100.00 from holding Magellan Health or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Anthem Inc vs. Magellan Health
Performance |
Timeline |
Anthem Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Magellan Health |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Anthem and Magellan Health Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Anthem and Magellan Health
The main advantage of trading using opposite Anthem and Magellan Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anthem position performs unexpectedly, Magellan Health 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 Magellan Health will offset losses from the drop in Magellan Health's long position.Anthem vs. Old Dominion Freight | Anthem vs. Keurig Dr Pepper | Anthem vs. Fernhill Beverage | Anthem vs. Sun Country Airlines |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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