Correlation Between UnitedHealth Group and Meta Financial
Can any of the company-specific risk be diversified away by investing in both UnitedHealth Group and Meta Financial 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 Meta Financial 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 Meta Financial Group, you can compare the effects of market volatilities on UnitedHealth Group and Meta Financial 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 Meta Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and Meta Financial.
Diversification Opportunities for UnitedHealth Group and Meta Financial
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between UnitedHealth and Meta is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group Incorporate and Meta Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Financial Group 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 Meta Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Financial Group has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and Meta Financial go up and down completely randomly.
Pair Corralation between UnitedHealth Group and Meta Financial
Assuming the 90 days horizon UnitedHealth Group is expected to generate 1.45 times less return on investment than Meta Financial. In addition to that, UnitedHealth Group is 1.44 times more volatile than Meta Financial Group. It trades about 0.12 of its total potential returns per unit of risk. Meta Financial Group is currently generating about 0.25 per unit of volatility. If you would invest 7,050 in Meta Financial Group on October 29, 2024 and sell it today you would earn a total of 450.00 from holding Meta Financial Group or generate 6.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UnitedHealth Group Incorporate vs. Meta Financial Group
Performance |
| Timeline |
| UnitedHealth Group |
| Meta Financial Group |
UnitedHealth Group and Meta Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UnitedHealth Group and Meta Financial
The main advantage of trading using opposite UnitedHealth Group and Meta Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group position performs unexpectedly, Meta Financial 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 Meta Financial will offset losses from the drop in Meta Financial's long position.| UnitedHealth Group vs. NH HOTEL GROUP | UnitedHealth Group vs. TITANIUM TRANSPORTGROUP | UnitedHealth Group vs. COLUMBIA SPORTSWEAR | UnitedHealth Group vs. DICKS Sporting Goods |
| Meta Financial vs. TELECOM ITALIA | Meta Financial vs. Iridium Communications | Meta Financial vs. ANGANG STEEL H | Meta Financial vs. Mount Gibson Iron |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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