Correlation Between Molina Healthcare and SENECA FOODS-A
Can any of the company-specific risk be diversified away by investing in both Molina Healthcare and SENECA FOODS-A 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 SENECA FOODS-A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Molina Healthcare and SENECA FOODS A, you can compare the effects of market volatilities on Molina Healthcare and SENECA FOODS-A 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 SENECA FOODS-A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molina Healthcare and SENECA FOODS-A.
Diversification Opportunities for Molina Healthcare and SENECA FOODS-A
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Molina and SENECA is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Molina Healthcare and SENECA FOODS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SENECA FOODS A 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 SENECA FOODS-A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SENECA FOODS A has no effect on the direction of Molina Healthcare i.e., Molina Healthcare and SENECA FOODS-A go up and down completely randomly.
Pair Corralation between Molina Healthcare and SENECA FOODS-A
Assuming the 90 days trading horizon Molina Healthcare is expected to generate 2.78 times less return on investment than SENECA FOODS-A. But when comparing it to its historical volatility, Molina Healthcare is 1.32 times less risky than SENECA FOODS-A. It trades about 0.02 of its potential returns per unit of risk. SENECA FOODS A is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5,450 in SENECA FOODS A on October 11, 2024 and sell it today you would earn a total of 1,600 from holding SENECA FOODS A or generate 29.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Molina Healthcare vs. SENECA FOODS A
Performance |
| Timeline |
| Molina Healthcare |
| SENECA FOODS A |
Molina Healthcare and SENECA FOODS-A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molina Healthcare and SENECA FOODS-A
The main advantage of trading using opposite Molina Healthcare and SENECA FOODS-A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molina Healthcare position performs unexpectedly, SENECA FOODS-A 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 SENECA FOODS-A will offset losses from the drop in SENECA FOODS-A's long position.| Molina Healthcare vs. Apple Inc | Molina Healthcare vs. Apple Inc | Molina Healthcare vs. Apple Inc | Molina Healthcare vs. Apple Inc |
| SENECA FOODS-A vs. OPKO HEALTH | SENECA FOODS-A vs. Fast Retailing Co | SENECA FOODS-A vs. Retail Estates NV | SENECA FOODS-A vs. Molina Healthcare |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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