Correlation Between QBE Insurance and Molina Healthcare
Can any of the company-specific risk be diversified away by investing in both QBE Insurance 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 QBE Insurance and Molina Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between QBE Insurance Group and Molina Healthcare, you can compare the effects of market volatilities on QBE Insurance 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 QBE Insurance with a short position of Molina Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and Molina Healthcare.
Diversification Opportunities for QBE Insurance and Molina Healthcare
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between QBE and Molina is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and Molina Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molina Healthcare and QBE Insurance 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 QBE Insurance Group 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 QBE Insurance i.e., QBE Insurance and Molina Healthcare go up and down completely randomly.
Pair Corralation between QBE Insurance and Molina Healthcare
Assuming the 90 days horizon QBE Insurance Group is expected to under-perform the Molina Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, QBE Insurance Group is 1.41 times less risky than Molina Healthcare. The stock trades about -0.03 of its potential returns per unit of risk. The Molina Healthcare is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 28,100 in Molina Healthcare on October 26, 2024 and sell it today you would earn a total of 1,050 from holding Molina Healthcare or generate 3.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
QBE Insurance Group vs. Molina Healthcare
Performance |
| Timeline |
| QBE Insurance Group |
| Molina Healthcare |
QBE Insurance and Molina Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and Molina Healthcare
The main advantage of trading using opposite QBE Insurance and Molina Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance 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.| QBE Insurance vs. PICC Property and | QBE Insurance vs. Fairfax Financial Holdings | QBE Insurance vs. Insurance Australia Group |
| Molina Healthcare vs. Hanison Construction Holdings | Molina Healthcare vs. HANOVER INSURANCE | Molina Healthcare vs. QBE Insurance Group | Molina Healthcare vs. UNIQA INSURANCE GR |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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