Correlation Between Bright Health and Molina Healthcare
Can any of the company-specific risk be diversified away by investing in both Bright Health 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 Bright Health and Molina Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bright Health Group and Molina Healthcare, you can compare the effects of market volatilities on Bright Health 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 Bright Health with a short position of Molina Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bright Health and Molina Healthcare.
Diversification Opportunities for Bright Health and Molina Healthcare
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bright and Molina is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Bright Health Group and Molina Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molina Healthcare and Bright Health 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 Bright Health Group 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 Bright Health i.e., Bright Health and Molina Healthcare go up and down completely randomly.
Pair Corralation between Bright Health and Molina Healthcare
If you would invest 1,229 in Bright Health Group on August 24, 2024 and sell it today you would earn a total of 0.00 from holding Bright Health Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.4% |
| Values | Daily Returns |
Bright Health Group vs. Molina Healthcare
Performance |
| Timeline |
| Bright Health Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Molina Healthcare |
Bright Health and Molina Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bright Health and Molina Healthcare
The main advantage of trading using opposite Bright Health and Molina Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bright Health 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.| Bright Health vs. Alignment Healthcare LLC | Bright Health vs. Molina Healthcare | Bright Health vs. Clover Health Investments | Bright Health vs. Centene Corp |
| Molina Healthcare vs. Cigna Corp | Molina Healthcare vs. Humana Inc | Molina Healthcare vs. Elevance Health | Molina Healthcare vs. Alignment Healthcare LLC |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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