Correlation Between Selectquote and GoHealth

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

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

Diversification Opportunities for Selectquote and GoHealth

0.9

Correlation Coefficient

Selectquote  GoHealth

Almost no diversification

The 3 months correlation between Selectquote and GoHealth is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Selectquote and GoHealth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoHealth and Selectquote 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 Selectquote 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 Selectquote i.e., Selectquote and GoHealth go up and down completely randomly.

Pair Corralation between Selectquote and GoHealth

Given the investment horizon of 90 days Selectquote is expected to generate 1.22 times more return on investment than GoHealth. However, Selectquote is 1.22 times more volatile than GoHealth. It trades about -0.07 of its potential returns per unit of risk. GoHealth is currently generating about -0.16 per unit of risk. 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

Selectquote  vs.  GoHealth

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.

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.

Pair Trading with Selectquote and GoHealth

The main advantage of trading using opposite Selectquote and GoHealth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Selectquote 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 Selectquote 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.