Correlation Between Elevance Health and Aveanna Healthcare

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

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

Diversification Opportunities for Elevance Health and Aveanna Healthcare

0.79

Correlation Coefficient

Elevance Health  Aveanna Healthcare

Poor diversification

The 3 months correlation between Elevance and Aveanna is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Elevance Health and Aveanna Healthcare Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aveanna Healthcare and Elevance Health 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 Elevance Health are associated (or correlated) with Aveanna Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aveanna Healthcare has no effect on the direction of Elevance Health i.e., Elevance Health and Aveanna Healthcare go up and down completely randomly.

Pair Corralation between Elevance Health and Aveanna Healthcare

Considering the 90-day investment horizon Elevance Health is expected to under-perform the Aveanna Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, Elevance Health is 1.06 times less risky than Aveanna Healthcare. The stock trades about -0.19 of its potential returns per unit of risk. The Aveanna Healthcare Holdings is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  482.00  in Aveanna Healthcare Holdings on May 7, 2025 and sell it today you would lose (100.00) from holding Aveanna Healthcare Holdings or give up 20.75% of portfolio value over 90 days.

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

Elevance Health  vs.  Aveanna Healthcare Holdings

Elevance Health

Risk-Adjusted Performance

Weakest

Over the last 90 days Elevance Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's essential indicators remain fairly stable which may send shares a bit higher in September 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Aveanna Healthcare

Risk-Adjusted Performance

Weakest

Over the last 90 days Aveanna Healthcare Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in September 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Elevance Health and Aveanna Healthcare

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

The idea behind Elevance Health and Aveanna Healthcare Holdings 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.