Correlation Between Assurant and GoHealth

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

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

Diversification Opportunities for Assurant and GoHealth

0.55

Correlation Coefficient

Assurant  GoHealth

Very weak diversification

The 3 months correlation between Assurant and GoHealth is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Assurant and GoHealth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoHealth and Assurant 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 Assurant are associated (or correlated) with GoHealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoHealth has no effect on the direction of Assurant i.e., Assurant and GoHealth go up and down completely randomly.

Pair Corralation between Assurant and GoHealth

Considering the 90-day investment horizon Assurant is expected to generate 2.0 times less return on investment than GoHealth. But when comparing it to its historical volatility, Assurant is 2.89 times less risky than GoHealth. It trades about 0.13 of its potential returns per unit of risk. GoHealth is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  905.00  in GoHealth on September 17, 2024 and sell it today you would earn a total of  179.00  from holding GoHealth or generate 19.78% return on investment over 90 days.

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

Assurant  vs.  GoHealth

Assurant

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Assurant are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating forward indicators, Assurant may actually be approaching a critical reversion point that can send shares even higher in January 2025.

GoHealth

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in GoHealth are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting fundamental indicators, GoHealth displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Assurant and GoHealth

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

The idea behind Assurant and GoHealth 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 the Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.