Correlation Between China Eastern and UnitedHealth Group
Can any of the company-specific risk be diversified away by investing in both China Eastern 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 China Eastern and UnitedHealth Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Eastern Airlines and UnitedHealth Group Incorporated, you can compare the effects of market volatilities on China Eastern 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 China Eastern with a short position of UnitedHealth Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Eastern and UnitedHealth Group.
Diversification Opportunities for China Eastern and UnitedHealth Group
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and UnitedHealth is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding China Eastern Airlines and UnitedHealth Group Incorporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UnitedHealth Group and China Eastern 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 China Eastern Airlines 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 China Eastern i.e., China Eastern and UnitedHealth Group go up and down completely randomly.
Pair Corralation between China Eastern and UnitedHealth Group
Assuming the 90 days trading horizon China Eastern Airlines is expected to generate 1.6 times more return on investment than UnitedHealth Group. However, China Eastern is 1.6 times more volatile than UnitedHealth Group Incorporated. It trades about 0.07 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 29.00 in China Eastern Airlines on November 6, 2024 and sell it today you would earn a total of 1.00 from holding China Eastern Airlines or generate 3.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
China Eastern Airlines vs. UnitedHealth Group Incorporate
Performance |
| Timeline |
| China Eastern Airlines |
| UnitedHealth Group |
China Eastern and UnitedHealth Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Eastern and UnitedHealth Group
The main advantage of trading using opposite China Eastern and UnitedHealth Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Eastern 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.| China Eastern vs. BROADPEAK SA EO | China Eastern vs. Tradegate AG Wertpapierhandelsbank | China Eastern vs. CarsalesCom | China Eastern vs. SIDETRADE EO 1 |
| 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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