Correlation Between Brookfield and UnitedHealth Group
Can any of the company-specific risk be diversified away by investing in both Brookfield 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 Brookfield and UnitedHealth Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookfield and UnitedHealth Group CDR, you can compare the effects of market volatilities on Brookfield 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 Brookfield with a short position of UnitedHealth Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield and UnitedHealth Group.
Diversification Opportunities for Brookfield and UnitedHealth Group
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Brookfield and UnitedHealth is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield and UnitedHealth Group CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UnitedHealth Group CDR and Brookfield 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 Brookfield 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 CDR has no effect on the direction of Brookfield i.e., Brookfield and UnitedHealth Group go up and down completely randomly.
Pair Corralation between Brookfield and UnitedHealth Group
Assuming the 90 days horizon Brookfield is expected to generate 0.79 times more return on investment than UnitedHealth Group. However, Brookfield is 1.27 times less risky than UnitedHealth Group. It trades about 0.28 of its potential returns per unit of risk. UnitedHealth Group CDR is currently generating about 0.17 per unit of risk. If you would invest 7,596 in Brookfield on August 28, 2024 and sell it today you would earn a total of 750.00 from holding Brookfield or generate 9.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Brookfield vs. UnitedHealth Group CDR
Performance |
| Timeline |
| Brookfield |
| UnitedHealth Group CDR |
Brookfield and UnitedHealth Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield and UnitedHealth Group
The main advantage of trading using opposite Brookfield and UnitedHealth Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield 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.| Brookfield vs. Brookfield Asset Management | Brookfield vs. Alimentation Couchen Tard | Brookfield vs. Brookfield Infrastructure Partners | Brookfield vs. Brookfield Infrastructure Corp |
| UnitedHealth Group vs. Boat Rocker Media | UnitedHealth Group vs. Profound Medical Corp | UnitedHealth Group vs. Bip Investment Corp | UnitedHealth Group vs. Canaf Investments |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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