Correlation Between Molina Healthcare and InspireMD
Can any of the company-specific risk be diversified away by investing in both Molina Healthcare and InspireMD 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 InspireMD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Molina Healthcare and InspireMD, you can compare the effects of market volatilities on Molina Healthcare and InspireMD 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 InspireMD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molina Healthcare and InspireMD.
Diversification Opportunities for Molina Healthcare and InspireMD
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Molina and InspireMD is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Molina Healthcare and InspireMD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InspireMD 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 InspireMD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InspireMD has no effect on the direction of Molina Healthcare i.e., Molina Healthcare and InspireMD go up and down completely randomly.
Pair Corralation between Molina Healthcare and InspireMD
Considering the 90-day investment horizon Molina Healthcare is expected to generate 0.76 times more return on investment than InspireMD. However, Molina Healthcare is 1.32 times less risky than InspireMD. It trades about -0.06 of its potential returns per unit of risk. InspireMD is currently generating about -0.04 per unit of risk. If you would invest 29,899 in Molina Healthcare on November 9, 2024 and sell it today you would lose (1,398) from holding Molina Healthcare or give up 4.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Molina Healthcare vs. InspireMD
Performance |
| Timeline |
| Molina Healthcare |
| InspireMD |
Molina Healthcare and InspireMD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molina Healthcare and InspireMD
The main advantage of trading using opposite Molina Healthcare and InspireMD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molina Healthcare position performs unexpectedly, InspireMD 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 InspireMD will offset losses from the drop in InspireMD's long position.| Molina Healthcare vs. Cigna Corp | Molina Healthcare vs. Humana Inc | Molina Healthcare vs. Elevance Health | Molina Healthcare vs. Alignment Healthcare LLC |
| InspireMD vs. Bone Biologics Corp | InspireMD vs. Tivic Health Systems | InspireMD vs. Bluejay Diagnostics | InspireMD vs. Vivos Therapeutics |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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