Correlation Between Elevance Health and HealthStream
Can any of the company-specific risk be diversified away by investing in both Elevance Health and HealthStream 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 HealthStream into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elevance Health and HealthStream, you can compare the effects of market volatilities on Elevance Health and HealthStream 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 HealthStream. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elevance Health and HealthStream.
Diversification Opportunities for Elevance Health and HealthStream
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Elevance and HealthStream is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Elevance Health and HealthStream in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HealthStream 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 HealthStream. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HealthStream has no effect on the direction of Elevance Health i.e., Elevance Health and HealthStream go up and down completely randomly.
Pair Corralation between Elevance Health and HealthStream
Considering the 90-day investment horizon Elevance Health is expected to generate 0.82 times more return on investment than HealthStream. However, Elevance Health is 1.22 times less risky than HealthStream. It trades about -0.06 of its potential returns per unit of risk. HealthStream is currently generating about -0.06 per unit of risk. If you would invest 42,870 in Elevance Health on March 17, 2025 and sell it today you would lose (4,415) from holding Elevance Health or give up 10.3% 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. HealthStream
Performance |
| Timeline |
| Elevance Health |
| HealthStream |
Elevance Health and HealthStream Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elevance Health and HealthStream
The main advantage of trading using opposite Elevance Health and HealthStream positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elevance Health position performs unexpectedly, HealthStream 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 HealthStream will offset losses from the drop in HealthStream's long position.| Elevance Health vs. Cigna Corp | Elevance Health vs. UnitedHealth Group Incorporated | Elevance Health vs. Centene Corp | Elevance Health vs. Molina Healthcare |
| HealthStream vs. National Research Corp | HealthStream vs. Forian Inc | HealthStream vs. Streamline Health Solutions | HealthStream vs. Definitive Healthcare Corp |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |