Correlation Between CVW CleanTech and UnitedHealth Group
Can any of the company-specific risk be diversified away by investing in both CVW CleanTech 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 CVW CleanTech and UnitedHealth Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVW CleanTech and UnitedHealth Group CDR, you can compare the effects of market volatilities on CVW CleanTech 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 CVW CleanTech with a short position of UnitedHealth Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVW CleanTech and UnitedHealth Group.
Diversification Opportunities for CVW CleanTech and UnitedHealth Group
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between CVW and UnitedHealth is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding CVW CleanTech 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 CVW CleanTech 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 CVW CleanTech 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 CVW CleanTech i.e., CVW CleanTech and UnitedHealth Group go up and down completely randomly.
Pair Corralation between CVW CleanTech and UnitedHealth Group
Assuming the 90 days horizon CVW CleanTech is expected to generate 3.26 times more return on investment than UnitedHealth Group. However, CVW CleanTech is 3.26 times more volatile than UnitedHealth Group CDR. It trades about 0.02 of its potential returns per unit of risk. UnitedHealth Group CDR is currently generating about 0.05 per unit of risk. If you would invest 92.00 in CVW CleanTech on August 31, 2024 and sell it today you would lose (5.00) from holding CVW CleanTech or give up 5.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVW CleanTech vs. UnitedHealth Group CDR
Performance |
| Timeline |
| CVW CleanTech |
| UnitedHealth Group CDR |
CVW CleanTech and UnitedHealth Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVW CleanTech and UnitedHealth Group
The main advantage of trading using opposite CVW CleanTech and UnitedHealth Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVW CleanTech 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.| CVW CleanTech vs. Solar Alliance Energy | CVW CleanTech vs. Global X Active | CVW CleanTech vs. Financial 15 Split | CVW CleanTech vs. Rubicon Organics |
| UnitedHealth Group vs. iShares Canadian HYBrid | UnitedHealth Group vs. Brompton European Dividend | UnitedHealth Group vs. Solar Alliance Energy | UnitedHealth Group vs. PHN Multi Style All Cap |
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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