Correlation Between UnitedHealth Group and Aegean Airlines
Can any of the company-specific risk be diversified away by investing in both UnitedHealth Group and Aegean Airlines 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 UnitedHealth Group and Aegean Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UnitedHealth Group Incorporated and Aegean Airlines SA, you can compare the effects of market volatilities on UnitedHealth Group and Aegean Airlines 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 UnitedHealth Group with a short position of Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and Aegean Airlines.
Diversification Opportunities for UnitedHealth Group and Aegean Airlines
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UnitedHealth and Aegean is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group Incorporate and Aegean Airlines SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegean Airlines SA and UnitedHealth Group 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 UnitedHealth Group Incorporated are associated (or correlated) with Aegean Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aegean Airlines SA has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and Aegean Airlines go up and down completely randomly.
Pair Corralation between UnitedHealth Group and Aegean Airlines
Assuming the 90 days horizon UnitedHealth Group is expected to generate 2.28 times less return on investment than Aegean Airlines. But when comparing it to its historical volatility, UnitedHealth Group Incorporated is 1.41 times less risky than Aegean Airlines. It trades about 0.03 of its potential returns per unit of risk. Aegean Airlines SA is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 688.00 in Aegean Airlines SA on November 7, 2024 and sell it today you would earn a total of 335.00 from holding Aegean Airlines SA or generate 48.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UnitedHealth Group Incorporate vs. Aegean Airlines SA
Performance |
| Timeline |
| UnitedHealth Group |
| Aegean Airlines SA |
UnitedHealth Group and Aegean Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UnitedHealth Group and Aegean Airlines
The main advantage of trading using opposite UnitedHealth Group and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group position performs unexpectedly, Aegean Airlines 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 Aegean Airlines will offset losses from the drop in Aegean Airlines' long position.| UnitedHealth Group vs. MidCap Financial Investment | UnitedHealth Group vs. AGNC INVESTMENT | UnitedHealth Group vs. GALENA MINING LTD | UnitedHealth Group vs. Guangdong Investment Limited |
| Aegean Airlines vs. MAGNUM MINING EXP | Aegean Airlines vs. STGEORGE MINING LTD | Aegean Airlines vs. Kingdee International Software | Aegean Airlines vs. Check Point Software |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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