Correlation Between GoHealth and CorVel Corp

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

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

Diversification Opportunities for GoHealth and CorVel Corp

0.25

Correlation Coefficient

GoHealth  CorVel Corp

Modest diversification

The 3 months correlation between GoHealth and CorVel is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding GoHealth and CorVel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CorVel Corp and GoHealth 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 GoHealth are associated (or correlated) with CorVel Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CorVel Corp has no effect on the direction of GoHealth i.e., GoHealth and CorVel Corp go up and down completely randomly.

Pair Corralation between GoHealth and CorVel Corp

Given the investment horizon of 90 days GoHealth is expected to under-perform the CorVel Corp. In addition to that, GoHealth is 2.18 times more volatile than CorVel Corp. It trades about -0.16 of its total potential returns per unit of risk. CorVel Corp is currently generating about -0.01 per unit of volatility. If you would invest  11,597  in CorVel Corp on February 3, 2025 and sell it today you would lose (394.00) from holding CorVel Corp or give up 3.4% of portfolio value over 90 days.

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

GoHealth  vs.  CorVel Corp

GoHealth

Risk-Adjusted Performance

Very Weak

Over the last 90 days GoHealth 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 fundamental indicators remain very healthy which may send shares a bit higher in June 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

CorVel Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days CorVel Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, CorVel Corp is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with GoHealth and CorVel Corp

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

The idea behind GoHealth and CorVel Corp 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.