Correlation Between G2D Investments and UnitedHealth Group
Can any of the company-specific risk be diversified away by investing in both G2D Investments 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 G2D Investments and UnitedHealth Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G2D Investments and UnitedHealth Group Incorporated, you can compare the effects of market volatilities on G2D Investments 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 G2D Investments with a short position of UnitedHealth Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of G2D Investments and UnitedHealth Group.
Diversification Opportunities for G2D Investments and UnitedHealth Group
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between G2D and UnitedHealth is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding G2D Investments and UnitedHealth Group Incorporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UnitedHealth Group and G2D Investments 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 G2D Investments 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 G2D Investments i.e., G2D Investments and UnitedHealth Group go up and down completely randomly.
Pair Corralation between G2D Investments and UnitedHealth Group
Assuming the 90 days trading horizon G2D Investments is expected to under-perform the UnitedHealth Group. In addition to that, G2D Investments is 1.08 times more volatile than UnitedHealth Group Incorporated. It trades about -0.16 of its total potential returns per unit of risk. UnitedHealth Group Incorporated is currently generating about 0.36 per unit of volatility. If you would invest 4,580 in UnitedHealth Group Incorporated on September 5, 2024 and sell it today you would earn a total of 694.00 from holding UnitedHealth Group Incorporated or generate 15.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
G2D Investments vs. UnitedHealth Group Incorporate
Performance |
| Timeline |
| G2D Investments |
| UnitedHealth Group |
G2D Investments and UnitedHealth Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G2D Investments and UnitedHealth Group
The main advantage of trading using opposite G2D Investments and UnitedHealth Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G2D Investments 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.| G2D Investments vs. Global X Funds | G2D Investments vs. Dell Technologies | G2D Investments vs. Take Two Interactive Software | G2D Investments vs. Healthpeak Properties |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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