Correlation Between Old Republic and Molina Healthcare
Can any of the company-specific risk be diversified away by investing in both Old Republic and Molina Healthcare 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 Old Republic and Molina Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Republic International and Molina Healthcare, you can compare the effects of market volatilities on Old Republic and Molina Healthcare 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 Old Republic with a short position of Molina Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Republic and Molina Healthcare.
Diversification Opportunities for Old Republic and Molina Healthcare
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Old and Molina is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Old Republic International and Molina Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molina Healthcare and Old Republic 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 Old Republic International are associated (or correlated) with Molina Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Molina Healthcare has no effect on the direction of Old Republic i.e., Old Republic and Molina Healthcare go up and down completely randomly.
Pair Corralation between Old Republic and Molina Healthcare
Considering the 90-day investment horizon Old Republic International is expected to generate 0.45 times more return on investment than Molina Healthcare. However, Old Republic International is 2.21 times less risky than Molina Healthcare. It trades about 0.14 of its potential returns per unit of risk. Molina Healthcare is currently generating about -0.01 per unit of risk. If you would invest 2,514 in Old Republic International on November 3, 2024 and sell it today you would earn a total of 1,144 from holding Old Republic International or generate 45.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Republic International vs. Molina Healthcare
Performance |
| Timeline |
| Old Republic Interna |
| Molina Healthcare |
Old Republic and Molina Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Republic and Molina Healthcare
The main advantage of trading using opposite Old Republic and Molina Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Republic position performs unexpectedly, Molina Healthcare 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 Molina Healthcare will offset losses from the drop in Molina Healthcare's long position.| Old Republic vs. Axa Equitable Holdings | Old Republic vs. American International Group | Old Republic vs. Arch Capital Group | Old Republic vs. Sun Life Financial |
| Molina Healthcare vs. Cigna Corp | Molina Healthcare vs. Humana Inc | Molina Healthcare vs. Elevance Health | Molina Healthcare vs. Alignment Healthcare LLC |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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