Correlation Between Lyxor 1 and UnitedHealth Group
Can any of the company-specific risk be diversified away by investing in both Lyxor 1 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 Lyxor 1 and UnitedHealth Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor 1 and UnitedHealth Group Incorporated, you can compare the effects of market volatilities on Lyxor 1 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 Lyxor 1 with a short position of UnitedHealth Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 1 and UnitedHealth Group.
Diversification Opportunities for Lyxor 1 and UnitedHealth Group
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lyxor and UnitedHealth is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 1 and UnitedHealth Group Incorporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UnitedHealth Group and Lyxor 1 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 Lyxor 1 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 Lyxor 1 i.e., Lyxor 1 and UnitedHealth Group go up and down completely randomly.
Pair Corralation between Lyxor 1 and UnitedHealth Group
Assuming the 90 days trading horizon Lyxor 1 is expected to generate 0.38 times more return on investment than UnitedHealth Group. However, Lyxor 1 is 2.6 times less risky than UnitedHealth Group. It trades about 0.47 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 2,533 in Lyxor 1 on November 6, 2024 and sell it today you would earn a total of 177.00 from holding Lyxor 1 or generate 6.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor 1 vs. UnitedHealth Group Incorporate
Performance |
| Timeline |
| Lyxor 1 |
| UnitedHealth Group |
Lyxor 1 and UnitedHealth Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor 1 and UnitedHealth Group
The main advantage of trading using opposite Lyxor 1 and UnitedHealth Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 1 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.| Lyxor 1 vs. Lyxor Fed Funds | Lyxor 1 vs. Lyxor BofAML USD | Lyxor 1 vs. Lyxor Index Fund | Lyxor 1 vs. Lyxor 1 TecDAX |
| 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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