Correlation Between GoHealth and Selectquote

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

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

Diversification Opportunities for GoHealth and Selectquote

0.9

Correlation Coefficient

GoHealth  Selectquote

Almost no diversification

The 3 months correlation between GoHealth and Selectquote is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding GoHealth and Selectquote in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selectquote 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 Selectquote. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selectquote has no effect on the direction of GoHealth i.e., GoHealth and Selectquote go up and down completely randomly.

Pair Corralation between GoHealth and Selectquote

Given the investment horizon of 90 days GoHealth is expected to under-perform the Selectquote. But the stock apears to be less risky and, when comparing its historical volatility, GoHealth is 1.22 times less risky than Selectquote. The stock trades about -0.16 of its potential returns per unit of risk. The Selectquote is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  410.00  in Selectquote on February 3, 2025 and sell it today you would lose (143.00) from holding Selectquote or give up 34.88% of portfolio value over 90 days.

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

GoHealth  vs.  Selectquote

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.

Selectquote

Risk-Adjusted Performance

Very Weak

Over the last 90 days Selectquote 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 basic indicators remain comparatively stable which may send shares a bit higher in June 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with GoHealth and Selectquote

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

The idea behind GoHealth and Selectquote 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.