Correlation Between DAX Index and UnitedHealth Group
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By analyzing existing cross correlation between DAX Index and UnitedHealth Group Incorporated, you can compare the effects of market volatilities on DAX Index 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 DAX Index with a short position of UnitedHealth Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and UnitedHealth Group.
Diversification Opportunities for DAX Index and UnitedHealth Group
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DAX and UnitedHealth is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and UnitedHealth Group Incorporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UnitedHealth Group and DAX Index 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 DAX Index 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 DAX Index i.e., DAX Index and UnitedHealth Group go up and down completely randomly.
Pair Corralation between DAX Index and UnitedHealth Group
Assuming the 90 days trading horizon DAX Index is expected to generate 0.36 times more return on investment than UnitedHealth Group. However, DAX Index is 2.78 times less risky than UnitedHealth Group. It trades about 0.41 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 2,021,619 in DAX Index on November 6, 2024 and sell it today you would earn a total of 121,205 from holding DAX Index or generate 6.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
DAX Index vs. UnitedHealth Group Incorporate
Performance |
| Timeline |
DAX Index and UnitedHealth Group Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
UnitedHealth Group Incorporated
Pair trading matchups for UnitedHealth Group
Pair Trading with DAX Index and UnitedHealth Group
The main advantage of trading using opposite DAX Index and UnitedHealth Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index 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.The idea behind DAX Index and UnitedHealth Group Incorporated pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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