Correlation Between Labrador Iron and UnitedHealth Group
Can any of the company-specific risk be diversified away by investing in both Labrador Iron 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 Labrador Iron and UnitedHealth Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Labrador Iron Ore and UnitedHealth Group CDR, you can compare the effects of market volatilities on Labrador Iron 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 Labrador Iron with a short position of UnitedHealth Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Labrador Iron and UnitedHealth Group.
Diversification Opportunities for Labrador Iron and UnitedHealth Group
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Labrador and UnitedHealth is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Labrador Iron Ore 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 Labrador Iron 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 Labrador Iron Ore 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 Labrador Iron i.e., Labrador Iron and UnitedHealth Group go up and down completely randomly.
Pair Corralation between Labrador Iron and UnitedHealth Group
Assuming the 90 days trading horizon Labrador Iron Ore is expected to generate 0.52 times more return on investment than UnitedHealth Group. However, Labrador Iron Ore is 1.91 times less risky than UnitedHealth Group. It trades about -0.11 of its potential returns per unit of risk. UnitedHealth Group CDR is currently generating about -0.16 per unit of risk. If you would invest 3,034 in Labrador Iron Ore on October 11, 2024 and sell it today you would lose (84.00) from holding Labrador Iron Ore or give up 2.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Labrador Iron Ore vs. UnitedHealth Group CDR
Performance |
| Timeline |
| Labrador Iron Ore |
| UnitedHealth Group CDR |
Labrador Iron and UnitedHealth Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Labrador Iron and UnitedHealth Group
The main advantage of trading using opposite Labrador Iron and UnitedHealth Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Labrador Iron 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.| Labrador Iron vs. Keyera Corp | Labrador Iron vs. Russel Metals | Labrador Iron vs. Freehold Royalties | Labrador Iron vs. Capital Power |
| UnitedHealth Group vs. CNJ Capital Investments | UnitedHealth Group vs. Nova Leap Health | UnitedHealth Group vs. CVS HEALTH CDR | UnitedHealth Group vs. Broadcom |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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