Correlation Between Xenia Hotels and Molina Healthcare
Can any of the company-specific risk be diversified away by investing in both Xenia Hotels and Molina Healthcare 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 Xenia Hotels and Molina Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xenia Hotels Resorts and Molina Healthcare, you can compare the effects of market volatilities on Xenia Hotels and Molina Healthcare 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 Xenia Hotels with a short position of Molina Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xenia Hotels and Molina Healthcare.
Diversification Opportunities for Xenia Hotels and Molina Healthcare
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xenia and Molina is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Xenia Hotels Resorts and Molina Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molina Healthcare and Xenia Hotels 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 Xenia Hotels Resorts are associated (or correlated) with Molina Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Molina Healthcare has no effect on the direction of Xenia Hotels i.e., Xenia Hotels and Molina Healthcare go up and down completely randomly.
Pair Corralation between Xenia Hotels and Molina Healthcare
Assuming the 90 days trading horizon Xenia Hotels is expected to generate 6.67 times less return on investment than Molina Healthcare. But when comparing it to its historical volatility, Xenia Hotels Resorts is 1.37 times less risky than Molina Healthcare. It trades about 0.05 of its potential returns per unit of risk. Molina Healthcare is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 28,170 in Molina Healthcare on November 5, 2024 and sell it today you would earn a total of 3,120 from holding Molina Healthcare or generate 11.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xenia Hotels Resorts vs. Molina Healthcare
Performance |
| Timeline |
| Xenia Hotels Resorts |
| Molina Healthcare |
Xenia Hotels and Molina Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xenia Hotels and Molina Healthcare
The main advantage of trading using opposite Xenia Hotels and Molina Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xenia Hotels position performs unexpectedly, Molina Healthcare 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 Molina Healthcare will offset losses from the drop in Molina Healthcare's long position.| Xenia Hotels vs. Gaztransport Technigaz SA | Xenia Hotels vs. SCANSOURCE | Xenia Hotels vs. Alfa Financial Software | Xenia Hotels vs. Casio Computer CoLtd |
| Molina Healthcare vs. The Trade Desk | Molina Healthcare vs. Canon Marketing Japan | Molina Healthcare vs. Fast Retailing Co | Molina Healthcare vs. Media and Games |
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 CEOs Directory module to screen CEOs from public companies around the world.
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