Correlation Between ISign Media and UnitedHealth Group
Can any of the company-specific risk be diversified away by investing in both ISign Media 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 ISign Media and UnitedHealth Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iSign Media Solutions and UnitedHealth Group CDR, you can compare the effects of market volatilities on ISign Media 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 ISign Media with a short position of UnitedHealth Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of ISign Media and UnitedHealth Group.
Diversification Opportunities for ISign Media and UnitedHealth Group
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between ISign and UnitedHealth is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding iSign Media Solutions 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 ISign Media 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 iSign Media Solutions 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 ISign Media i.e., ISign Media and UnitedHealth Group go up and down completely randomly.
Pair Corralation between ISign Media and UnitedHealth Group
Assuming the 90 days horizon ISign Media is expected to generate 5.69 times less return on investment than UnitedHealth Group. But when comparing it to its historical volatility, iSign Media Solutions is 2.1 times less risky than UnitedHealth Group. It trades about 0.01 of its potential returns per unit of risk. UnitedHealth Group CDR is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,825 in UnitedHealth Group CDR on August 29, 2024 and sell it today you would earn a total of 65.00 from holding UnitedHealth Group CDR or generate 2.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iSign Media Solutions vs. UnitedHealth Group CDR
Performance |
| Timeline |
| iSign Media Solutions |
| UnitedHealth Group CDR |
ISign Media and UnitedHealth Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ISign Media and UnitedHealth Group
The main advantage of trading using opposite ISign Media and UnitedHealth Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ISign Media 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.| ISign Media vs. Quorum Information Technologies | ISign Media vs. Highwood Asset Management | ISign Media vs. Upstart Investments | ISign Media vs. Atrium Mortgage Investment |
| UnitedHealth Group vs. Bip Investment Corp | UnitedHealth Group vs. Firan Technology Group | UnitedHealth Group vs. Brookfield Investments | UnitedHealth Group vs. Northstar Clean Technologies |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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