Correlation Between ASML Holding and UnitedHealth Group
Can any of the company-specific risk be diversified away by investing in both ASML Holding 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 ASML Holding and UnitedHealth Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASML Holding NV and UnitedHealth Group Incorporated, you can compare the effects of market volatilities on ASML Holding 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 ASML Holding with a short position of UnitedHealth Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML Holding and UnitedHealth Group.
Diversification Opportunities for ASML Holding and UnitedHealth Group
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ASML and UnitedHealth is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and UnitedHealth Group Incorporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UnitedHealth Group and ASML Holding 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 ASML Holding NV 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 ASML Holding i.e., ASML Holding and UnitedHealth Group go up and down completely randomly.
Pair Corralation between ASML Holding and UnitedHealth Group
Assuming the 90 days trading horizon ASML Holding NV is expected to under-perform the UnitedHealth Group. In addition to that, ASML Holding is 1.31 times more volatile than UnitedHealth Group Incorporated. It trades about -0.06 of its total potential returns per unit of risk. UnitedHealth Group Incorporated is currently generating about 0.1 per unit of volatility. If you would invest 49,900 in UnitedHealth Group Incorporated on November 6, 2024 and sell it today you would earn a total of 1,690 from holding UnitedHealth Group Incorporated or generate 3.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
ASML Holding NV vs. UnitedHealth Group Incorporate
Performance |
| Timeline |
| ASML Holding NV |
| UnitedHealth Group |
ASML Holding and UnitedHealth Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASML Holding and UnitedHealth Group
The main advantage of trading using opposite ASML Holding and UnitedHealth Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASML Holding 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.| ASML Holding vs. CDL INVESTMENT | ASML Holding vs. New Residential Investment | ASML Holding vs. Sekisui Chemical Co | ASML Holding vs. Apollo Investment Corp |
| UnitedHealth Group vs. MidCap Financial Investment | UnitedHealth Group vs. AGNC INVESTMENT | UnitedHealth Group vs. GALENA MINING LTD | UnitedHealth Group vs. Guangdong Investment Limited |
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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