Correlation Between UnitedHealth Group and DINE SAB
Can any of the company-specific risk be diversified away by investing in both UnitedHealth Group and DINE SAB 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 DINE SAB 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 DINE SAB de, you can compare the effects of market volatilities on UnitedHealth Group and DINE SAB 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 DINE SAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and DINE SAB.
Diversification Opportunities for UnitedHealth Group and DINE SAB
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UnitedHealth and DINE is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group Incorporate and DINE SAB de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DINE SAB de 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 DINE SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DINE SAB de has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and DINE SAB go up and down completely randomly.
Pair Corralation between UnitedHealth Group and DINE SAB
Assuming the 90 days trading horizon UnitedHealth Group Incorporated is expected to generate 0.53 times more return on investment than DINE SAB. However, UnitedHealth Group Incorporated is 1.9 times less risky than DINE SAB. It trades about 0.21 of its potential returns per unit of risk. DINE SAB de is currently generating about -0.02 per unit of risk. If you would invest 1,130,100 in UnitedHealth Group Incorporated on August 30, 2024 and sell it today you would earn a total of 122,775 from holding UnitedHealth Group Incorporated or generate 10.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
UnitedHealth Group Incorporate vs. DINE SAB de
Performance |
| Timeline |
| UnitedHealth Group |
| DINE SAB de |
UnitedHealth Group and DINE SAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UnitedHealth Group and DINE SAB
The main advantage of trading using opposite UnitedHealth Group and DINE SAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group position performs unexpectedly, DINE SAB 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 DINE SAB will offset losses from the drop in DINE SAB's long position.| UnitedHealth Group vs. MercadoLibre | UnitedHealth Group vs. Southwest Airlines | UnitedHealth Group vs. The Walt Disney | UnitedHealth Group vs. Apple Inc |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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