Correlation Between Bright Health and UnitedHealth Group
Can any of the company-specific risk be diversified away by investing in both Bright Health 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 Bright Health and UnitedHealth Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bright Health Group and UnitedHealth Group Incorporated, you can compare the effects of market volatilities on Bright Health 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 Bright Health with a short position of UnitedHealth Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bright Health and UnitedHealth Group.
Diversification Opportunities for Bright Health and UnitedHealth Group
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bright and UnitedHealth is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bright Health Group and UnitedHealth Group Incorporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UnitedHealth Group and Bright Health 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 Bright Health Group 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 Bright Health i.e., Bright Health and UnitedHealth Group go up and down completely randomly.
Pair Corralation between Bright Health and UnitedHealth Group
If you would invest 50,976 in UnitedHealth Group Incorporated on November 18, 2024 and sell it today you would earn a total of 1,375 from holding UnitedHealth Group Incorporated or generate 2.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Bright Health Group vs. UnitedHealth Group Incorporate
Performance |
| Timeline |
| Bright Health Group |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| UnitedHealth Group |
Bright Health and UnitedHealth Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bright Health and UnitedHealth Group
The main advantage of trading using opposite Bright Health and UnitedHealth Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bright Health 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.| Bright Health vs. Alignment Healthcare LLC | Bright Health vs. Molina Healthcare | Bright Health vs. Clover Health Investments | Bright Health vs. Centene Corp |
| UnitedHealth Group vs. Cigna Corp | UnitedHealth Group vs. Humana Inc | UnitedHealth Group vs. Elevance Health | UnitedHealth Group vs. Centene Corp |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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