Correlation Between Leons Furniture and UnitedHealth Group
Can any of the company-specific risk be diversified away by investing in both Leons Furniture 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 Leons Furniture and UnitedHealth Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leons Furniture Limited and UnitedHealth Group CDR, you can compare the effects of market volatilities on Leons Furniture 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 Leons Furniture with a short position of UnitedHealth Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leons Furniture and UnitedHealth Group.
Diversification Opportunities for Leons Furniture and UnitedHealth Group
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Leons and UnitedHealth is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Leons Furniture Limited 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 Leons Furniture 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 Leons Furniture Limited 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 Leons Furniture i.e., Leons Furniture and UnitedHealth Group go up and down completely randomly.
Pair Corralation between Leons Furniture and UnitedHealth Group
Assuming the 90 days trading horizon Leons Furniture Limited is expected to generate 0.88 times more return on investment than UnitedHealth Group. However, Leons Furniture Limited is 1.13 times less risky than UnitedHealth Group. It trades about 0.02 of its potential returns per unit of risk. UnitedHealth Group CDR is currently generating about -0.03 per unit of risk. If you would invest 2,435 in Leons Furniture Limited on October 25, 2024 and sell it today you would earn a total of 65.00 from holding Leons Furniture Limited or generate 2.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leons Furniture Limited vs. UnitedHealth Group CDR
Performance |
| Timeline |
| Leons Furniture |
| UnitedHealth Group CDR |
Leons Furniture and UnitedHealth Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leons Furniture and UnitedHealth Group
The main advantage of trading using opposite Leons Furniture and UnitedHealth Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leons Furniture 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.| Leons Furniture vs. High Liner Foods | Leons Furniture vs. Richelieu Hardware | Leons Furniture vs. North West | Leons Furniture vs. Toromont Industries |
| UnitedHealth Group vs. Calibre Mining Corp | UnitedHealth Group vs. Advent Wireless | UnitedHealth Group vs. Nano One Materials | UnitedHealth Group vs. Leading Edge Materials |
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.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |