Correlation Between Molina Healthcare and Oscar Health
Can any of the company-specific risk be diversified away by investing in both Molina Healthcare and Oscar 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 Oscar 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 Oscar Health, you can compare the effects of market volatilities on Molina Healthcare and Oscar 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 Oscar Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molina Healthcare and Oscar Health.
Diversification Opportunities for Molina Healthcare and Oscar Health
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Molina and Oscar is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Molina Healthcare and Oscar Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oscar Health 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 Oscar Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oscar Health has no effect on the direction of Molina Healthcare i.e., Molina Healthcare and Oscar Health go up and down completely randomly.
Pair Corralation between Molina Healthcare and Oscar Health
Considering the 90-day investment horizon Molina Healthcare is expected to generate 0.62 times more return on investment than Oscar Health. However, Molina Healthcare is 1.62 times less risky than Oscar Health. It trades about 0.09 of its potential returns per unit of risk. Oscar Health is currently generating about 0.05 per unit of risk. If you would invest 27,500 in Molina Healthcare on August 24, 2024 and sell it today you would earn a total of 2,107 from holding Molina Healthcare or generate 7.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Molina Healthcare vs. Oscar Health
Performance |
| Timeline |
| Molina Healthcare |
| Oscar Health |
Molina Healthcare and Oscar Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molina Healthcare and Oscar Health
The main advantage of trading using opposite Molina Healthcare and Oscar Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molina Healthcare position performs unexpectedly, Oscar 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 Oscar Health will offset losses from the drop in Oscar 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 |
| Oscar Health vs. Molina Healthcare | Oscar Health vs. Centene Corp | Oscar Health vs. Elevance Health | Oscar Health vs. Clover Health Investments |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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