Correlation Between Samsung Electronics and UnitedHealth Group
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics 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 Samsung Electronics and UnitedHealth Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Electronics Co and UnitedHealth Group Incorporated, you can compare the effects of market volatilities on Samsung Electronics 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 Samsung Electronics with a short position of UnitedHealth Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and UnitedHealth Group.
Diversification Opportunities for Samsung Electronics and UnitedHealth Group
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and UnitedHealth is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and UnitedHealth Group Incorporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UnitedHealth Group and Samsung Electronics 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 Samsung Electronics Co 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 Samsung Electronics i.e., Samsung Electronics and UnitedHealth Group go up and down completely randomly.
Pair Corralation between Samsung Electronics and UnitedHealth Group
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the UnitedHealth Group. In addition to that, Samsung Electronics is 1.02 times more volatile than UnitedHealth Group Incorporated. It trades about -0.13 of its total potential returns per unit of risk. UnitedHealth Group Incorporated is currently generating about 0.19 per unit of volatility. If you would invest 1,135,997 in UnitedHealth Group Incorporated on September 1, 2024 and sell it today you would earn a total of 107,693 from holding UnitedHealth Group Incorporated or generate 9.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. UnitedHealth Group Incorporate
Performance |
| Timeline |
| Samsung Electronics |
| UnitedHealth Group |
Samsung Electronics and UnitedHealth Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and UnitedHealth Group
The main advantage of trading using opposite Samsung Electronics and UnitedHealth Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics 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.| Samsung Electronics vs. Apple Inc | Samsung Electronics vs. Netflix | Samsung Electronics vs. Monster Beverage Corp |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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