Correlation Between Dow Jones and UNITEDHEALTH
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By analyzing existing cross correlation between Dow Jones Industrial and UNITEDHEALTH GROUP INC, you can compare the effects of market volatilities on Dow Jones and UNITEDHEALTH 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 Dow Jones with a short position of UNITEDHEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and UNITEDHEALTH.
Diversification Opportunities for Dow Jones and UNITEDHEALTH
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dow and UNITEDHEALTH is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and UNITEDHEALTH GROUP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITEDHEALTH GROUP INC and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with UNITEDHEALTH. 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 INC has no effect on the direction of Dow Jones i.e., Dow Jones and UNITEDHEALTH go up and down completely randomly.
Pair Corralation between Dow Jones and UNITEDHEALTH
Assuming the 90 days trading horizon Dow Jones Industrial is expected to under-perform the UNITEDHEALTH. But the index apears to be less risky and, when comparing its historical volatility, Dow Jones Industrial is 1.01 times less risky than UNITEDHEALTH. The index trades about -0.34 of its potential returns per unit of risk. The UNITEDHEALTH GROUP INC is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 9,855 in UNITEDHEALTH GROUP INC on December 15, 2024 and sell it today you would earn a total of 4.00 from holding UNITEDHEALTH GROUP INC or generate 0.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dow Jones Industrial vs. UNITEDHEALTH GROUP INC
Performance |
| Timeline |
Dow Jones and UNITEDHEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
UNITEDHEALTH GROUP INC
Pair trading matchups for UNITEDHEALTH
Pair Trading with Dow Jones and UNITEDHEALTH
The main advantage of trading using opposite Dow Jones and UNITEDHEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, UNITEDHEALTH 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 will offset losses from the drop in UNITEDHEALTH's long position.| Dow Jones vs. Alliance International Education | ||
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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