Correlation Between Academy Sports and UnitedHealth Group
Can any of the company-specific risk be diversified away by investing in both Academy Sports and UnitedHealth Group 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 Academy Sports and UnitedHealth Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Academy Sports and and UnitedHealth Group Incorporated, you can compare the effects of market volatilities on Academy Sports and UnitedHealth Group 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 Academy Sports with a short position of UnitedHealth Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Academy Sports and UnitedHealth Group.
Diversification Opportunities for Academy Sports and UnitedHealth Group
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Academy and UnitedHealth is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Academy Sports and and UnitedHealth Group Incorporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UnitedHealth Group and Academy Sports 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 Academy Sports and are associated (or correlated) with UnitedHealth Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UnitedHealth Group has no effect on the direction of Academy Sports i.e., Academy Sports and UnitedHealth Group go up and down completely randomly.
Pair Corralation between Academy Sports and UnitedHealth Group
Assuming the 90 days trading horizon Academy Sports and is expected to under-perform the UnitedHealth Group. But the stock apears to be less risky and, when comparing its historical volatility, Academy Sports and is 4.09 times less risky than UnitedHealth Group. The stock trades about -0.34 of its potential returns per unit of risk. The UnitedHealth Group Incorporated is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4,448 in UnitedHealth Group Incorporated on November 3, 2024 and sell it today you would earn a total of 89.00 from holding UnitedHealth Group Incorporated or generate 2.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 78.26% |
| Values | Daily Returns |
Academy Sports and vs. UnitedHealth Group Incorporate
Performance |
| Timeline |
| Academy Sports |
| UnitedHealth Group |
Academy Sports and UnitedHealth Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Academy Sports and UnitedHealth Group
The main advantage of trading using opposite Academy Sports and UnitedHealth Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Academy Sports position performs unexpectedly, UnitedHealth Group 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 UnitedHealth Group will offset losses from the drop in UnitedHealth Group's long position.| Academy Sports vs. Spotify Technology SA | Academy Sports vs. KB Financial Group | Academy Sports vs. Prudential Financial | Academy Sports vs. Deutsche Bank Aktiengesellschaft |
| UnitedHealth Group vs. Jefferies Financial Group | UnitedHealth Group vs. Nordon Indstrias Metalrgicas | UnitedHealth Group vs. Broadridge Financial Solutions, | UnitedHealth Group vs. Prudential Financial |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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