Correlation Between Seagate Technology and UNITEDHEALTH

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Can any of the company-specific risk be diversified away by investing in both Seagate Technology and UNITEDHEALTH 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 Seagate Technology and UNITEDHEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seagate Technology PLC and UNITEDHEALTH GROUP INC, you can compare the effects of market volatilities on Seagate Technology and UNITEDHEALTH 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 Seagate Technology with a short position of UNITEDHEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seagate Technology and UNITEDHEALTH.

Diversification Opportunities for Seagate Technology and UNITEDHEALTH

SeagateUNITEDHEALTHDiversified AwaySeagateUNITEDHEALTHDiversified Away100%
0.35
  Correlation Coefficient

Weak diversification

The 3 months correlation between Seagate and UNITEDHEALTH is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Seagate Technology PLC and UNITEDHEALTH GROUP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITEDHEALTH GROUP INC and Seagate Technology 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 Seagate Technology PLC are associated (or correlated) with UNITEDHEALTH. 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 INC has no effect on the direction of Seagate Technology i.e., Seagate Technology and UNITEDHEALTH go up and down completely randomly.

Pair Corralation between Seagate Technology and UNITEDHEALTH

Considering the 90-day investment horizon Seagate Technology PLC is expected to under-perform the UNITEDHEALTH. In addition to that, Seagate Technology is 2.78 times more volatile than UNITEDHEALTH GROUP INC. It trades about -0.3 of its total potential returns per unit of risk. UNITEDHEALTH GROUP INC is currently generating about -0.24 per unit of volatility. If you would invest  9,747  in UNITEDHEALTH GROUP INC on December 15, 2024 and sell it today you would lose (404.00) from holding UNITEDHEALTH GROUP INC or give up 4.14% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy95.45%
ValuesDaily Returns

Seagate Technology PLC  vs.  UNITEDHEALTH GROUP INC

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-50510
JavaScript chart by amCharts 3.21.15STX 91324PCY6
       Timeline  
Seagate Technology PLC 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Seagate Technology PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
JavaScript chart by amCharts 3.21.15JanFebMarFebMar859095100105110
UNITEDHEALTH GROUP INC 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days UNITEDHEALTH GROUP INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, UNITEDHEALTH is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15312440239495969798

Seagate Technology and UNITEDHEALTH Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.51-2.63-1.75-0.87-0.010.791.62.413.224.03 0.20.40.60.8
JavaScript chart by amCharts 3.21.15STX 91324PCY6
       Returns  

Pair Trading with Seagate Technology and UNITEDHEALTH

The main advantage of trading using opposite Seagate Technology and UNITEDHEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seagate Technology position performs unexpectedly, UNITEDHEALTH 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 will offset losses from the drop in UNITEDHEALTH's long position.
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The idea behind Seagate Technology PLC and UNITEDHEALTH GROUP INC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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