Correlation Between Molina Healthcare and HOCHSCHILD MINING

Can any of the company-specific risk be diversified away by investing in both Molina Healthcare and HOCHSCHILD MINING 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 HOCHSCHILD MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Molina Healthcare and HOCHSCHILD MINING, you can compare the effects of market volatilities on Molina Healthcare and HOCHSCHILD MINING 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 HOCHSCHILD MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molina Healthcare and HOCHSCHILD MINING.

Diversification Opportunities for Molina Healthcare and HOCHSCHILD MINING

0.0

Correlation Coefficient

Molina Healthcare  HOCHSCHILD MINING

Pay attention - limited upside

The 3 months correlation between Molina and HOCHSCHILD is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Molina Healthcare and HOCHSCHILD MINING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOCHSCHILD MINING 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 HOCHSCHILD MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HOCHSCHILD MINING has no effect on the direction of Molina Healthcare i.e., Molina Healthcare and HOCHSCHILD MINING go up and down completely randomly.

Pair Corralation between Molina Healthcare and HOCHSCHILD MINING

Assuming the 90 days trading horizon Molina Healthcare is expected to generate 1.13 times more return on investment than HOCHSCHILD MINING. However, Molina Healthcare is 1.13 times more volatile than HOCHSCHILD MINING. It trades about 0.04 of its potential returns per unit of risk. HOCHSCHILD MINING is currently generating about -0.03 per unit of risk. If you would invest  25,730  in Molina Healthcare on October 23, 2024 and sell it today you would earn a total of  1,380  from holding Molina Healthcare or generate 5.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Molina Healthcare  vs.  HOCHSCHILD MINING

Molina Healthcare

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Molina Healthcare are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Molina Healthcare may actually be approaching a critical reversion point that can send shares even higher in February 2025.

HOCHSCHILD MINING

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HOCHSCHILD MINING has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, HOCHSCHILD MINING is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Molina Healthcare and HOCHSCHILD MINING

The main advantage of trading using opposite Molina Healthcare and HOCHSCHILD MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molina Healthcare position performs unexpectedly, HOCHSCHILD MINING 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 HOCHSCHILD MINING will offset losses from the drop in HOCHSCHILD MINING's long position.

The idea behind Molina Healthcare and HOCHSCHILD MINING pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.