Correlation Between Public Storage and UnitedHealth Group
Can any of the company-specific risk be diversified away by investing in both Public Storage 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 Public Storage and UnitedHealth Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Storage and UnitedHealth Group Incorporated, you can compare the effects of market volatilities on Public Storage 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 Public Storage with a short position of UnitedHealth Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Storage and UnitedHealth Group.
Diversification Opportunities for Public Storage and UnitedHealth Group
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Public and UnitedHealth is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Public Storage and UnitedHealth Group Incorporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UnitedHealth Group and Public Storage 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 Public Storage 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 has no effect on the direction of Public Storage i.e., Public Storage and UnitedHealth Group go up and down completely randomly.
Pair Corralation between Public Storage and UnitedHealth Group
Assuming the 90 days trading horizon Public Storage is expected to under-perform the UnitedHealth Group. But the stock apears to be less risky and, when comparing its historical volatility, Public Storage is 1.63 times less risky than UnitedHealth Group. The stock trades about -0.18 of its potential returns per unit of risk. The UnitedHealth Group Incorporated is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 4,448 in UnitedHealth Group Incorporated on November 2, 2024 and sell it today you would earn a total of 109.00 from holding UnitedHealth Group Incorporated or generate 2.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Public Storage vs. UnitedHealth Group Incorporate
Performance |
| Timeline |
| Public Storage |
| UnitedHealth Group |
Public Storage and UnitedHealth Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Storage and UnitedHealth Group
The main advantage of trading using opposite Public Storage and UnitedHealth Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Storage 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.| Public Storage vs. Brpr Corporate Offices | Public Storage vs. The Hartford Financial | Public Storage vs. MAHLE Metal Leve | Public Storage vs. Bread Financial Holdings |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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