Correlation Between MODIVCARE INC and HYGEIA HC

Can any of the company-specific risk be diversified away by investing in both MODIVCARE INC and HYGEIA HC 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 MODIVCARE INC and HYGEIA HC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MODIVCARE INC DL 001 and HYGEIA HC HLDGS, you can compare the effects of market volatilities on MODIVCARE INC and HYGEIA HC 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 MODIVCARE INC with a short position of HYGEIA HC. Check out your portfolio center. Please also check ongoing floating volatility patterns of MODIVCARE INC and HYGEIA HC.

Diversification Opportunities for MODIVCARE INC and HYGEIA HC

0.09

Correlation Coefficient

MODIVCARE INC  HYGEIA HC

Significant diversification

The 3 months correlation between MODIVCARE and HYGEIA is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding MODIVCARE INC DL 001 and HYGEIA HC HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYGEIA HC HLDGS and MODIVCARE INC 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 MODIVCARE INC DL 001 are associated (or correlated) with HYGEIA HC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYGEIA HC HLDGS has no effect on the direction of MODIVCARE INC i.e., MODIVCARE INC and HYGEIA HC go up and down completely randomly.

Pair Corralation between MODIVCARE INC and HYGEIA HC

Assuming the 90 days trading horizon MODIVCARE INC DL 001 is expected to generate 4.37 times more return on investment than HYGEIA HC. However, MODIVCARE INC is 4.37 times more volatile than HYGEIA HC HLDGS. It trades about 0.15 of its potential returns per unit of risk. HYGEIA HC HLDGS is currently generating about 0.08 per unit of risk. If you would invest  92.00  in MODIVCARE INC DL 001 on April 24, 2025 and sell it today you would earn a total of  146.00  from holding MODIVCARE INC DL 001 or generate 158.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

MODIVCARE INC DL 001  vs.  HYGEIA HC HLDGS

MODIVCARE INC DL

Risk-Adjusted Performance

Good

Over the last 90 days MODIVCARE INC DL 001 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak technical and fundamental indicators, MODIVCARE INC reported solid returns over the last few months and may actually be approaching a breakup point.

HYGEIA HC HLDGS

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in HYGEIA HC HLDGS are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, HYGEIA HC reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MODIVCARE INC and HYGEIA HC

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

The idea behind MODIVCARE INC DL 001 and HYGEIA HC HLDGS 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.