Correlation Between Cencora and Assured Guaranty

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

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

Diversification Opportunities for Cencora and Assured Guaranty

-0.14

Correlation Coefficient

Cencora  Assured Guaranty

Good diversification

The 3 months correlation between Cencora and Assured is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Cencora and Assured Guaranty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assured Guaranty and Cencora 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 Cencora are associated (or correlated) with Assured Guaranty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assured Guaranty has no effect on the direction of Cencora i.e., Cencora and Assured Guaranty go up and down completely randomly.

Pair Corralation between Cencora and Assured Guaranty

Considering the 90-day investment horizon Cencora is expected to generate 1.53 times more return on investment than Assured Guaranty. However, Cencora is 1.53 times more volatile than Assured Guaranty. It trades about 0.01 of its potential returns per unit of risk. Assured Guaranty is currently generating about -0.09 per unit of risk. If you would invest  29,025  in Cencora on May 6, 2025 and sell it today you would earn a total of  80.00  from holding Cencora or generate 0.28% return on investment over 90 days.

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

Cencora  vs.  Assured Guaranty

Cencora

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cencora has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Cencora is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Assured Guaranty

Risk-Adjusted Performance

Very Weak

Over the last 90 days Assured Guaranty has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Assured Guaranty is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Cencora and Assured Guaranty

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

The idea behind Cencora and Assured Guaranty 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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.