Correlation Between Apple and Molina Healthcare
Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and Molina Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Molina Healthcare, you can compare the effects of market volatilities on Apple 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 Apple with a short position of Molina Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Molina Healthcare.
Diversification Opportunities for Apple and Molina Healthcare
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Apple and Molina is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Molina Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molina Healthcare and Apple 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 Apple Inc 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 Apple i.e., Apple and Molina Healthcare go up and down completely randomly.
Pair Corralation between Apple and Molina Healthcare
Assuming the 90 days trading horizon Apple Inc is expected to under-perform the Molina Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc is 1.15 times less risky than Molina Healthcare. The stock trades about -0.44 of its potential returns per unit of risk. The Molina Healthcare is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 27,880 in Molina Healthcare on October 26, 2024 and sell it today you would earn a total of 1,270 from holding Molina Healthcare or generate 4.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. Molina Healthcare
Performance |
| Timeline |
| Apple Inc |
| Molina Healthcare |
Apple and Molina Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Molina Healthcare
The main advantage of trading using opposite Apple and Molina Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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.| Apple vs. QBE Insurance Group | Apple vs. NORTHEAST UTILITIES | Apple vs. The Hanover Insurance | Apple vs. PURETECH HEALTH PLC |
| Molina Healthcare vs. Hanison Construction Holdings | Molina Healthcare vs. HANOVER INSURANCE | Molina Healthcare vs. QBE Insurance Group | Molina Healthcare vs. UNIQA INSURANCE GR |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |