Correlation Between Molina Healthcare and Axcelis Technologies
Can any of the company-specific risk be diversified away by investing in both Molina Healthcare and Axcelis Technologies 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 Axcelis Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Molina Healthcare and Axcelis Technologies, you can compare the effects of market volatilities on Molina Healthcare and Axcelis Technologies 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 Axcelis Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molina Healthcare and Axcelis Technologies.
Diversification Opportunities for Molina Healthcare and Axcelis Technologies
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Molina and Axcelis is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Molina Healthcare and Axcelis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axcelis Technologies 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 Axcelis Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axcelis Technologies has no effect on the direction of Molina Healthcare i.e., Molina Healthcare and Axcelis Technologies go up and down completely randomly.
Pair Corralation between Molina Healthcare and Axcelis Technologies
Assuming the 90 days trading horizon Molina Healthcare is expected to generate 1.39 times more return on investment than Axcelis Technologies. However, Molina Healthcare is 1.39 times more volatile than Axcelis Technologies. It trades about -0.01 of its potential returns per unit of risk. Axcelis Technologies is currently generating about -0.17 per unit of risk. If you would invest 30,820 in Molina Healthcare on October 14, 2024 and sell it today you would lose (2,150) from holding Molina Healthcare or give up 6.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Molina Healthcare vs. Axcelis Technologies
Performance |
| Timeline |
| Molina Healthcare |
| Axcelis Technologies |
Molina Healthcare and Axcelis Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molina Healthcare and Axcelis Technologies
The main advantage of trading using opposite Molina Healthcare and Axcelis Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molina Healthcare position performs unexpectedly, Axcelis Technologies 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 Axcelis Technologies will offset losses from the drop in Axcelis Technologies' long position.| Molina Healthcare vs. Apple Inc | Molina Healthcare vs. Apple Inc | Molina Healthcare vs. Apple Inc | Molina Healthcare vs. Apple Inc |
| Axcelis Technologies vs. Fortescue Metals Group | Axcelis Technologies vs. HEALTHSTREAM | Axcelis Technologies vs. NIGHTINGALE HEALTH EO | Axcelis Technologies 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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