Correlation Between ModivCare and Simulations Plus

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

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

Diversification Opportunities for ModivCare and Simulations Plus

-0.81

Correlation Coefficient

ModivCare  Simulations Plus

Pay attention - limited upside

The 3 months correlation between ModivCare and Simulations is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding ModivCare and Simulations Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simulations Plus and ModivCare 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 are associated (or correlated) with Simulations Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simulations Plus has no effect on the direction of ModivCare i.e., ModivCare and Simulations Plus go up and down completely randomly.

Pair Corralation between ModivCare and Simulations Plus

Given the investment horizon of 90 days ModivCare is expected to generate 3.29 times more return on investment than Simulations Plus. However, ModivCare is 3.29 times more volatile than Simulations Plus. It trades about 0.15 of its potential returns per unit of risk. Simulations Plus is currently generating about -0.23 per unit of risk. If you would invest  119.00  in ModivCare on April 30, 2025 and sell it today you would earn a total of  183.00  from holding ModivCare or generate 153.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

ModivCare  vs.  Simulations Plus

ModivCare

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ModivCare are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile fundamental indicators, ModivCare showed solid returns over the last few months and may actually be approaching a breakup point.

Simulations Plus

Risk-Adjusted Performance

Very Weak

Over the last 90 days Simulations Plus has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's essential indicators remain relatively invariable which may send shares a bit higher in August 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with ModivCare and Simulations Plus

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

The idea behind ModivCare and Simulations Plus 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.