Correlation Between Molina Healthcare and National Health
Can any of the company-specific risk be diversified away by investing in both Molina Healthcare and National Health 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 Molina Healthcare and National Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Molina Healthcare and National Health Investors, you can compare the effects of market volatilities on Molina Healthcare and National Health 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 Molina Healthcare with a short position of National Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molina Healthcare and National Health.
Diversification Opportunities for Molina Healthcare and National Health
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Molina and National is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Molina Healthcare and National Health Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Health Investors and Molina Healthcare 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 Molina Healthcare are associated (or correlated) with National Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Health Investors has no effect on the direction of Molina Healthcare i.e., Molina Healthcare and National Health go up and down completely randomly.
Pair Corralation between Molina Healthcare and National Health
Assuming the 90 days trading horizon Molina Healthcare is expected to under-perform the National Health. In addition to that, Molina Healthcare is 1.67 times more volatile than National Health Investors. It trades about 0.0 of its total potential returns per unit of risk. National Health Investors is currently generating about 0.02 per unit of volatility. If you would invest 6,334 in National Health Investors on November 3, 2024 and sell it today you would earn a total of 166.00 from holding National Health Investors or generate 2.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Molina Healthcare vs. National Health Investors
Performance |
| Timeline |
| Molina Healthcare |
| National Health Investors |
Molina Healthcare and National Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molina Healthcare and National Health
The main advantage of trading using opposite Molina Healthcare and National Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molina Healthcare position performs unexpectedly, National Health 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 National Health will offset losses from the drop in National Health's long position.| Molina Healthcare vs. SIVERS SEMICONDUCTORS AB | Molina Healthcare vs. NorAm Drilling AS | Molina Healthcare vs. Volkswagen AG | Molina Healthcare vs. Darden Restaurants |
| National Health vs. VIVA WINE GROUP | National Health vs. AIR PRODCHEMICALS | National Health vs. Cogent Communications Holdings | National Health vs. China BlueChemical |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |