Correlation Between US Financial and UnitedHealth Group
Can any of the company-specific risk be diversified away by investing in both US Financial 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 US Financial and UnitedHealth Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Financial 15 and UnitedHealth Group CDR, you can compare the effects of market volatilities on US Financial 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 US Financial with a short position of UnitedHealth Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Financial and UnitedHealth Group.
Diversification Opportunities for US Financial and UnitedHealth Group
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FTU-PB and UnitedHealth is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding US Financial 15 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 US Financial 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 US Financial 15 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 US Financial i.e., US Financial and UnitedHealth Group go up and down completely randomly.
Pair Corralation between US Financial and UnitedHealth Group
Assuming the 90 days trading horizon US Financial is expected to generate 1.15 times less return on investment than UnitedHealth Group. In addition to that, US Financial is 1.5 times more volatile than UnitedHealth Group CDR. It trades about 0.08 of its total potential returns per unit of risk. UnitedHealth Group CDR is currently generating about 0.13 per unit of volatility. If you would invest 2,682 in UnitedHealth Group CDR on August 25, 2024 and sell it today you would earn a total of 139.00 from holding UnitedHealth Group CDR or generate 5.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Financial 15 vs. UnitedHealth Group CDR
Performance |
| Timeline |
| US Financial 15 |
| UnitedHealth Group CDR |
US Financial and UnitedHealth Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Financial and UnitedHealth Group
The main advantage of trading using opposite US Financial and UnitedHealth Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Financial 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.| US Financial vs. North American Financial | US Financial vs. Prime Dividend Corp | US Financial vs. Canadian Life Companies | US Financial vs. Financial 15 Split |
| UnitedHealth Group vs. VentriPoint Diagnostics | UnitedHealth Group vs. CHAR Technologies | UnitedHealth Group vs. Forstrong Global Income | UnitedHealth Group vs. BMO Aggregate Bond |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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