Correlation Between UnitedHealth Group and ProShares Trust
Can any of the company-specific risk be diversified away by investing in both UnitedHealth Group and ProShares Trust 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 ProShares Trust 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 ProShares Trust , you can compare the effects of market volatilities on UnitedHealth Group and ProShares Trust 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 ProShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and ProShares Trust.
Diversification Opportunities for UnitedHealth Group and ProShares Trust
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between UnitedHealth and ProShares is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group Incorporate and ProShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Trust 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 ProShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Trust has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and ProShares Trust go up and down completely randomly.
Pair Corralation between UnitedHealth Group and ProShares Trust
Assuming the 90 days trading horizon UnitedHealth Group Incorporated is expected to generate 1.3 times more return on investment than ProShares Trust. However, UnitedHealth Group is 1.3 times more volatile than ProShares Trust . It trades about 0.07 of its potential returns per unit of risk. ProShares Trust is currently generating about -0.03 per unit of risk. If you would invest 930,594 in UnitedHealth Group Incorporated on September 4, 2024 and sell it today you would earn a total of 313,906 from holding UnitedHealth Group Incorporated or generate 33.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
UnitedHealth Group Incorporate vs. ProShares Trust
Performance |
| Timeline |
| UnitedHealth Group |
| ProShares Trust |
UnitedHealth Group and ProShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UnitedHealth Group and ProShares Trust
The main advantage of trading using opposite UnitedHealth Group and ProShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group position performs unexpectedly, ProShares Trust 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 ProShares Trust will offset losses from the drop in ProShares Trust's long position.| UnitedHealth Group vs. McEwen Mining | UnitedHealth Group vs. Grupo Carso SAB | UnitedHealth Group vs. Samsung Electronics Co | UnitedHealth Group vs. Micron Technology |
| ProShares Trust vs. ProShares Trust | ProShares Trust vs. ProShares Trust | ProShares Trust vs. ProShares Trust | ProShares Trust vs. ProShares Trust |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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