Correlation Between Geely Automobile and Molina Healthcare
Can any of the company-specific risk be diversified away by investing in both Geely Automobile 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 Geely Automobile and Molina Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geely Automobile Holdings and Molina Healthcare, you can compare the effects of market volatilities on Geely Automobile 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 Geely Automobile with a short position of Molina Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and Molina Healthcare.
Diversification Opportunities for Geely Automobile and Molina Healthcare
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Geely and Molina is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and Molina Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molina Healthcare and Geely Automobile 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 Geely Automobile Holdings 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 Geely Automobile i.e., Geely Automobile and Molina Healthcare go up and down completely randomly.
Pair Corralation between Geely Automobile and Molina Healthcare
Assuming the 90 days horizon Geely Automobile Holdings is expected to under-perform the Molina Healthcare. In addition to that, Geely Automobile is 1.28 times more volatile than Molina Healthcare. It trades about -0.38 of its total potential returns per unit of risk. Molina Healthcare is currently generating about 0.05 per unit of volatility. If you would invest 28,310 in Molina Healthcare on October 13, 2024 and sell it today you would earn a total of 310.00 from holding Molina Healthcare or generate 1.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geely Automobile Holdings vs. Molina Healthcare
Performance |
| Timeline |
| Geely Automobile Holdings |
| Molina Healthcare |
Geely Automobile and Molina Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and Molina Healthcare
The main advantage of trading using opposite Geely Automobile and Molina Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile 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.| Geely Automobile vs. NAGOYA RAILROAD | Geely Automobile vs. Hyrican Informationssysteme Aktiengesellschaft | Geely Automobile vs. TRAINLINE PLC LS | Geely Automobile vs. Linedata Services SA |
| Molina Healthcare vs. Geely Automobile Holdings | Molina Healthcare vs. New Residential Investment | Molina Healthcare vs. T MOBILE INCDL 00001 | Molina Healthcare vs. Charter Communications |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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