Correlation Between Imperial Metals and UnitedHealth Group
Can any of the company-specific risk be diversified away by investing in both Imperial Metals 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 Imperial Metals and UnitedHealth Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Imperial Metals and UnitedHealth Group CDR, you can compare the effects of market volatilities on Imperial Metals 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 Imperial Metals with a short position of UnitedHealth Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imperial Metals and UnitedHealth Group.
Diversification Opportunities for Imperial Metals and UnitedHealth Group
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Imperial and UnitedHealth is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Imperial Metals 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 Imperial Metals 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 Imperial Metals 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 Imperial Metals i.e., Imperial Metals and UnitedHealth Group go up and down completely randomly.
Pair Corralation between Imperial Metals and UnitedHealth Group
Assuming the 90 days trading horizon Imperial Metals is expected to generate 1.17 times less return on investment than UnitedHealth Group. In addition to that, Imperial Metals is 1.04 times more volatile than UnitedHealth Group CDR. It trades about 0.12 of its total potential returns per unit of risk. UnitedHealth Group CDR is currently generating about 0.14 per unit of volatility. If you would invest 2,444 in UnitedHealth Group CDR on November 5, 2024 and sell it today you would earn a total of 139.00 from holding UnitedHealth Group CDR or generate 5.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Imperial Metals vs. UnitedHealth Group CDR
Performance |
| Timeline |
| Imperial Metals |
| UnitedHealth Group CDR |
Imperial Metals and UnitedHealth Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Imperial Metals and UnitedHealth Group
The main advantage of trading using opposite Imperial Metals and UnitedHealth Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imperial Metals 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.| Imperial Metals vs. Taseko Mines | Imperial Metals vs. Mountain Boy Minerals | Imperial Metals vs. iMetal Resources | Imperial Metals vs. Western Copper and |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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