Correlation Between Eco Growth and GoHealth

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

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

Diversification Opportunities for Eco Growth and GoHealth

-0.53

Correlation Coefficient

Eco Growth  GoHealth

Excellent diversification

The 3 months correlation between Eco and GoHealth is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Eco Growth Strategies and GoHealth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoHealth and Eco Growth 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 Eco Growth Strategies 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 Eco Growth i.e., Eco Growth and GoHealth go up and down completely randomly.

Pair Corralation between Eco Growth and GoHealth

Given the investment horizon of 90 days Eco Growth is expected to generate 1.59 times less return on investment than GoHealth. In addition to that, Eco Growth is 5.55 times more volatile than GoHealth. It trades about 0.01 of its total potential returns per unit of risk. GoHealth is currently generating about 0.06 per unit of volatility. If you would invest  944.00  in GoHealth on September 18, 2024 and sell it today you would earn a total of  111.00  from holding GoHealth or generate 11.76% return on investment over 90 days.

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

Eco Growth Strategies  vs.  GoHealth

Eco Growth Strategies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eco Growth Strategies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively inconsistent technical and fundamental indicators, Eco Growth may actually be approaching a critical reversion point that can send shares even higher in January 2025.

GoHealth

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GoHealth are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent fundamental indicators, GoHealth displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eco Growth and GoHealth

The main advantage of trading using opposite Eco Growth and GoHealth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eco Growth 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 Eco Growth Strategies 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.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.