Correlation Between Canadian General and UnitedHealth Group
Can any of the company-specific risk be diversified away by investing in both Canadian General 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 Canadian General and UnitedHealth Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian General Investments and UnitedHealth Group CDR, you can compare the effects of market volatilities on Canadian General 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 Canadian General with a short position of UnitedHealth Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian General and UnitedHealth Group.
Diversification Opportunities for Canadian General and UnitedHealth Group
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Canadian and UnitedHealth is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Canadian General Investments 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 Canadian General 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 Canadian General Investments 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 Canadian General i.e., Canadian General and UnitedHealth Group go up and down completely randomly.
Pair Corralation between Canadian General and UnitedHealth Group
Assuming the 90 days trading horizon Canadian General Investments is expected to generate 0.34 times more return on investment than UnitedHealth Group. However, Canadian General Investments is 2.96 times less risky than UnitedHealth Group. It trades about 0.01 of its potential returns per unit of risk. UnitedHealth Group CDR is currently generating about -0.14 per unit of risk. If you would invest 4,150 in Canadian General Investments on October 10, 2024 and sell it today you would earn a total of 1.00 from holding Canadian General Investments or generate 0.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian General Investments vs. UnitedHealth Group CDR
Performance |
| Timeline |
| Canadian General Inv |
| UnitedHealth Group CDR |
Canadian General and UnitedHealth Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian General and UnitedHealth Group
The main advantage of trading using opposite Canadian General and UnitedHealth Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian General 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.| Canadian General vs. Uniteds Limited | Canadian General vs. Economic Investment Trust | Canadian General vs. abrdn Asia Pacific | Canadian General vs. Clairvest Group |
| UnitedHealth Group vs. Canaf Investments | UnitedHealth Group vs. Diversified Royalty Corp | UnitedHealth Group vs. Definity Financial Corp | UnitedHealth Group vs. Labrador Iron Ore |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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