Correlation Between ATT and UnitedHealth Group
Can any of the company-specific risk be diversified away by investing in both ATT 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 ATT and UnitedHealth Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and UnitedHealth Group Incorporated, you can compare the effects of market volatilities on ATT 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 ATT with a short position of UnitedHealth Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and UnitedHealth Group.
Diversification Opportunities for ATT and UnitedHealth Group
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ATT and UnitedHealth is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and UnitedHealth Group Incorporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UnitedHealth Group and ATT 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 ATT Inc 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 ATT i.e., ATT and UnitedHealth Group go up and down completely randomly.
Pair Corralation between ATT and UnitedHealth Group
Assuming the 90 days trading horizon ATT Inc is expected to generate 0.88 times more return on investment than UnitedHealth Group. However, ATT Inc is 1.14 times less risky than UnitedHealth Group. It trades about 0.23 of its potential returns per unit of risk. UnitedHealth Group Incorporated is currently generating about 0.1 per unit of risk. If you would invest 3,683 in ATT Inc on September 2, 2024 and sell it today you would earn a total of 933.00 from holding ATT Inc or generate 25.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATT Inc vs. UnitedHealth Group Incorporate
Performance |
| Timeline |
| ATT Inc |
| UnitedHealth Group |
ATT and UnitedHealth Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and UnitedHealth Group
The main advantage of trading using opposite ATT and UnitedHealth Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT 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.| ATT vs. Lupatech SA | ATT vs. Rossi Residencial SA | ATT vs. Usinas Siderrgicas de | ATT vs. Refinaria de Petrleos |
| UnitedHealth Group vs. Odontoprev SA | UnitedHealth Group vs. Fras le SA | UnitedHealth Group vs. Western Digital | UnitedHealth Group vs. Energisa SA |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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