Correlation Between Benefytt Technologies and Molina Healthcare

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

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

Diversification Opportunities for Benefytt Technologies and Molina Healthcare

0.0

Correlation Coefficient

Benefytt Technologies  Molina Healthcare

Pay attention - limited upside

The 3 months correlation between Benefytt and Molina is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Benefytt Technologies and Molina Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molina Healthcare and Benefytt Technologies 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 Benefytt Technologies 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 Benefytt Technologies i.e., Benefytt Technologies and Molina Healthcare go up and down completely randomly.

Pair Corralation between Benefytt Technologies and Molina Healthcare

If you would invest (100.00) in Benefytt Technologies on February 25, 2024 and sell it today you would earn a total of  100.00  from holding Benefytt Technologies or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Benefytt Technologies  vs.  Molina Healthcare

Benefytt Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Benefytt Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward indicators, Benefytt Technologies is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Molina Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Molina Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in June 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Benefytt Technologies and Molina Healthcare

The main advantage of trading using opposite Benefytt Technologies and Molina Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benefytt Technologies 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.

The idea behind Benefytt Technologies and Molina Healthcare 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.