Correlation Between T Mobile and UnitedHealth Group
Can any of the company-specific risk be diversified away by investing in both T Mobile 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 T Mobile and UnitedHealth Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between T Mobile and UnitedHealth Group Incorporated, you can compare the effects of market volatilities on T Mobile 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 T Mobile with a short position of UnitedHealth Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Mobile and UnitedHealth Group.
Diversification Opportunities for T Mobile and UnitedHealth Group
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between T1MU34 and UnitedHealth is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding T Mobile and UnitedHealth Group Incorporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UnitedHealth Group and T Mobile 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 T Mobile 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 T Mobile i.e., T Mobile and UnitedHealth Group go up and down completely randomly.
Pair Corralation between T Mobile and UnitedHealth Group
Assuming the 90 days trading horizon T Mobile is expected to generate 1.0 times more return on investment than UnitedHealth Group. However, T Mobile is 1.0 times more volatile than UnitedHealth Group Incorporated. It trades about 0.17 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 64,622 in T Mobile on November 5, 2024 and sell it today you would earn a total of 4,369 from holding T Mobile or generate 6.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
T Mobile vs. UnitedHealth Group Incorporate
Performance |
| Timeline |
| T Mobile |
| UnitedHealth Group |
T Mobile and UnitedHealth Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with T Mobile and UnitedHealth Group
The main advantage of trading using opposite T Mobile and UnitedHealth Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Mobile 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.| T Mobile vs. Eastman Chemical | T Mobile vs. United Airlines Holdings | T Mobile vs. Melco Resorts Entertainment | T Mobile vs. Broadridge Financial Solutions, |
| UnitedHealth Group vs. Capital One Financial | UnitedHealth Group vs. Credit Acceptance | UnitedHealth Group vs. Citizens Financial Group, | UnitedHealth Group vs. Datadog, |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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