Correlation Between Premium Income and UnitedHealth Group
Can any of the company-specific risk be diversified away by investing in both Premium Income 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 Premium Income and UnitedHealth Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Premium Income and UnitedHealth Group CDR, you can compare the effects of market volatilities on Premium Income 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 Premium Income with a short position of UnitedHealth Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premium Income and UnitedHealth Group.
Diversification Opportunities for Premium Income and UnitedHealth Group
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Premium and UnitedHealth is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Premium Income 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 Premium Income 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 Premium Income 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 Premium Income i.e., Premium Income and UnitedHealth Group go up and down completely randomly.
Pair Corralation between Premium Income and UnitedHealth Group
Assuming the 90 days trading horizon Premium Income is expected to under-perform the UnitedHealth Group. In addition to that, Premium Income is 1.66 times more volatile than UnitedHealth Group CDR. It trades about -0.02 of its total potential returns per unit of risk. UnitedHealth Group CDR is currently generating about 0.02 per unit of volatility. If you would invest 2,495 in UnitedHealth Group CDR on September 12, 2024 and sell it today you would earn a total of 203.00 from holding UnitedHealth Group CDR or generate 8.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Premium Income vs. UnitedHealth Group CDR
Performance |
| Timeline |
| Premium Income |
| UnitedHealth Group CDR |
Premium Income and UnitedHealth Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premium Income and UnitedHealth Group
The main advantage of trading using opposite Premium Income and UnitedHealth Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premium Income 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.| Premium Income vs. Sprott Physical Gold | Premium Income vs. Brompton Split Banc | Premium Income vs. TDb Split Corp | Premium Income vs. Prime Dividend Corp |
| UnitedHealth Group vs. Premium Income | UnitedHealth Group vs. E L Financial Corp | UnitedHealth Group vs. Fairfax Financial Holdings | UnitedHealth Group vs. Fairfax Fin Hld |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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