Correlation Between Centene Corp and Surgery Partners

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

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

Diversification Opportunities for Centene Corp and Surgery Partners

0.6

Correlation Coefficient

Centene Corp  Surgery Partners

Poor diversification

The 3 months correlation between Centene and Surgery is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Centene Corp and Surgery Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surgery Partners and Centene Corp 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 Centene Corp are associated (or correlated) with Surgery Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surgery Partners has no effect on the direction of Centene Corp i.e., Centene Corp and Surgery Partners go up and down completely randomly.

Pair Corralation between Centene Corp and Surgery Partners

Considering the 90-day investment horizon Centene Corp is expected to generate 0.83 times more return on investment than Surgery Partners. However, Centene Corp is 1.21 times less risky than Surgery Partners. It trades about -0.16 of its potential returns per unit of risk. Surgery Partners is currently generating about -0.16 per unit of risk. If you would invest  7,883  in Centene Corp on August 30, 2024 and sell it today you would lose (1,890) from holding Centene Corp or give up 23.98% of portfolio value over 90 days.

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

Centene Corp  vs.  Surgery Partners

Centene Corp

Risk-Adjusted Performance

0 of 100

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 unfluctuating performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Surgery Partners

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Surgery Partners has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Centene Corp and Surgery Partners

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

The idea behind Centene Corp and Surgery Partners 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.