Correlation Between Molina Healthcare and Bright Health
Can any of the company-specific risk be diversified away by investing in both Molina Healthcare and Bright 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 Bright 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 Bright Health Group, you can compare the effects of market volatilities on Molina Healthcare and Bright 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 Bright Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molina Healthcare and Bright Health.
Diversification Opportunities for Molina Healthcare and Bright Health
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Molina and Bright is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Molina Healthcare and Bright Health Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bright Health Group 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 Bright Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bright Health Group has no effect on the direction of Molina Healthcare i.e., Molina Healthcare and Bright Health go up and down completely randomly.
Pair Corralation between Molina Healthcare and Bright Health
If you would invest 1,229 in Bright Health Group on August 28, 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 | 4.76% |
| Values | Daily Returns |
Molina Healthcare vs. Bright Health Group
Performance |
| Timeline |
| Molina Healthcare |
| Bright Health Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Molina Healthcare and Bright Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molina Healthcare and Bright Health
The main advantage of trading using opposite Molina Healthcare and Bright Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molina Healthcare position performs unexpectedly, Bright 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 Bright Health will offset losses from the drop in Bright Health's long position.| Molina Healthcare vs. Cigna Corp | Molina Healthcare vs. Humana Inc | Molina Healthcare vs. Elevance Health | Molina Healthcare vs. Alignment Healthcare LLC |
| Bright Health vs. Alignment Healthcare LLC | Bright Health vs. Molina Healthcare | Bright Health vs. Clover Health Investments | Bright Health vs. Centene Corp |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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