Correlation Between Bio Techne and UnitedHealth Group
Can any of the company-specific risk be diversified away by investing in both Bio Techne 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 Bio Techne and UnitedHealth Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bio Techne and UnitedHealth Group Incorporated, you can compare the effects of market volatilities on Bio Techne 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 Bio Techne with a short position of UnitedHealth Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bio Techne and UnitedHealth Group.
Diversification Opportunities for Bio Techne and UnitedHealth Group
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bio and UnitedHealth is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Bio Techne and UnitedHealth Group Incorporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UnitedHealth Group and Bio Techne 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 Bio Techne 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 Bio Techne i.e., Bio Techne and UnitedHealth Group go up and down completely randomly.
Pair Corralation between Bio Techne and UnitedHealth Group
Assuming the 90 days trading horizon Bio Techne is expected to generate 5.51 times more return on investment than UnitedHealth Group. However, Bio Techne is 5.51 times more volatile than UnitedHealth Group Incorporated. It trades about 0.04 of its potential returns per unit of risk. UnitedHealth Group Incorporated is currently generating about 0.02 per unit of risk. If you would invest 1,389 in Bio Techne on November 28, 2024 and sell it today you would lose (119.00) from holding Bio Techne or give up 8.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 36.94% |
| Values | Daily Returns |
Bio Techne vs. UnitedHealth Group Incorporate
Performance |
| Timeline |
| Bio Techne |
| UnitedHealth Group |
Bio Techne and UnitedHealth Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bio Techne and UnitedHealth Group
The main advantage of trading using opposite Bio Techne and UnitedHealth Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bio Techne 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.| Bio Techne vs. SSC Technologies Holdings, | Bio Techne vs. JB Hunt Transport | Bio Techne vs. Uber Technologies | Bio Techne vs. TechnipFMC plc |
| UnitedHealth Group vs. Live Nation Entertainment, | UnitedHealth Group vs. Costco Wholesale | UnitedHealth Group vs. Melco Resorts Entertainment | UnitedHealth Group vs. Ross Stores |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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