Correlation Between Molina Healthcare and Sun Life
Can any of the company-specific risk be diversified away by investing in both Molina Healthcare and Sun Life 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 Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Molina Healthcare and Sun Life Financial, you can compare the effects of market volatilities on Molina Healthcare and Sun Life 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 Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molina Healthcare and Sun Life.
Diversification Opportunities for Molina Healthcare and Sun Life
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Molina and Sun is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Molina Healthcare and Sun Life Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Life Financial 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 Sun Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Life Financial has no effect on the direction of Molina Healthcare i.e., Molina Healthcare and Sun Life go up and down completely randomly.
Pair Corralation between Molina Healthcare and Sun Life
Considering the 90-day investment horizon Molina Healthcare is expected to generate 2.14 times more return on investment than Sun Life. However, Molina Healthcare is 2.14 times more volatile than Sun Life Financial. It trades about -0.01 of its potential returns per unit of risk. Sun Life Financial is currently generating about -0.08 per unit of risk. If you would invest 29,079 in Molina Healthcare on October 23, 2024 and sell it today you would lose (458.00) from holding Molina Healthcare or give up 1.58% 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. Sun Life Financial
Performance |
| Timeline |
| Molina Healthcare |
| Sun Life Financial |
Molina Healthcare and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molina Healthcare and Sun Life
The main advantage of trading using opposite Molina Healthcare and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molina Healthcare position performs unexpectedly, Sun Life 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 Sun Life will offset losses from the drop in Sun Life's long position.| Molina Healthcare vs. Cigna Corp | Molina Healthcare vs. Humana Inc | Molina Healthcare vs. Elevance Health | Molina Healthcare vs. Alignment Healthcare LLC |
| Sun Life vs. Axa Equitable Holdings | Sun Life vs. American International Group | Sun Life vs. Arch Capital Group | Sun Life vs. Old Republic International |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |