Correlation Between International Metals and UnitedHealth Group
Can any of the company-specific risk be diversified away by investing in both International 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 International 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 International Metals Mining and UnitedHealth Group CDR, you can compare the effects of market volatilities on International 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 International Metals with a short position of UnitedHealth Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Metals and UnitedHealth Group.
Diversification Opportunities for International Metals and UnitedHealth Group
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between International and UnitedHealth is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding International Metals Mining 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 International 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 International Metals Mining 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 International Metals i.e., International Metals and UnitedHealth Group go up and down completely randomly.
Pair Corralation between International Metals and UnitedHealth Group
Assuming the 90 days horizon International Metals Mining is expected to under-perform the UnitedHealth Group. In addition to that, International Metals is 2.32 times more volatile than UnitedHealth Group CDR. It trades about -0.05 of its total potential returns per unit of risk. UnitedHealth Group CDR is currently generating about -0.01 per unit of volatility. If you would invest 2,543 in UnitedHealth Group CDR on October 12, 2024 and sell it today you would lose (23.00) from holding UnitedHealth Group CDR or give up 0.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
International Metals Mining vs. UnitedHealth Group CDR
Performance |
| Timeline |
| International Metals |
| UnitedHealth Group CDR |
International Metals and UnitedHealth Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Metals and UnitedHealth Group
The main advantage of trading using opposite International Metals and UnitedHealth Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International 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.| International Metals vs. Verizon Communications CDR | International Metals vs. Nova Leap Health | International Metals vs. Champion Iron | International Metals vs. UnitedHealth Group CDR |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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