Correlation Between Alignment Healthcare and Centene Corp

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

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

Diversification Opportunities for Alignment Healthcare and Centene Corp

0.6

Correlation Coefficient

Alignment Healthcare  Centene Corp

Poor diversification

The 3 months correlation between Alignment and Centene is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Alignment Healthcare LLC and Centene Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centene Corp and Alignment Healthcare 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 Alignment Healthcare LLC 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 Alignment Healthcare i.e., Alignment Healthcare and Centene Corp go up and down completely randomly.

Pair Corralation between Alignment Healthcare and Centene Corp

Given the investment horizon of 90 days Alignment Healthcare LLC is expected to under-perform the Centene Corp. In addition to that, Alignment Healthcare is 1.38 times more volatile than Centene Corp. It trades about -0.1 of its total potential returns per unit of risk. Centene Corp is currently generating about -0.04 per unit of volatility. If you would invest  5,934  in Centene Corp on March 23, 2025 and sell it today you would lose (419.00) from holding Centene Corp or give up 7.06% of portfolio value over 90 days.

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

Alignment Healthcare LLC  vs.  Centene Corp

Alignment Healthcare LLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alignment Healthcare LLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical indicators remain rather sound which may send shares a bit higher in July 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

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 Alignment Healthcare and Centene Corp

The main advantage of trading using opposite Alignment Healthcare and Centene Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alignment Healthcare 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 Alignment Healthcare LLC 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.