Correlation Between Palantir Technologies and UnitedHealth Group
Can any of the company-specific risk be diversified away by investing in both Palantir Technologies 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 Palantir Technologies and UnitedHealth Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Palantir Technologies and UnitedHealth Group Incorporated, you can compare the effects of market volatilities on Palantir Technologies 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 Palantir Technologies with a short position of UnitedHealth Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palantir Technologies and UnitedHealth Group.
Diversification Opportunities for Palantir Technologies and UnitedHealth Group
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Palantir and UnitedHealth is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Palantir Technologies and UnitedHealth Group Incorporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UnitedHealth Group and Palantir Technologies 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 Palantir Technologies 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 Palantir Technologies i.e., Palantir Technologies and UnitedHealth Group go up and down completely randomly.
Pair Corralation between Palantir Technologies and UnitedHealth Group
Assuming the 90 days trading horizon Palantir Technologies is expected to generate 1.84 times more return on investment than UnitedHealth Group. However, Palantir Technologies is 1.84 times more volatile than UnitedHealth Group Incorporated. It trades about 0.21 of its potential returns per unit of risk. UnitedHealth Group Incorporated is currently generating about 0.03 per unit of risk. If you would invest 7,895 in Palantir Technologies on October 17, 2024 and sell it today you would earn a total of 5,305 from holding Palantir Technologies or generate 67.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Palantir Technologies vs. UnitedHealth Group Incorporate
Performance |
| Timeline |
| Palantir Technologies |
| UnitedHealth Group |
Palantir Technologies and UnitedHealth Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Palantir Technologies and UnitedHealth Group
The main advantage of trading using opposite Palantir Technologies and UnitedHealth Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palantir Technologies 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.| Palantir Technologies vs. Verizon Communications | Palantir Technologies vs. Vulcan Materials | Palantir Technologies vs. Monster Beverage | Palantir Technologies vs. Zoom Video Communications |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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