Correlation Between UnitedHealth Group and VanEck Vectors
Can any of the company-specific risk be diversified away by investing in both UnitedHealth Group and VanEck Vectors 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 VanEck Vectors 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 VanEck Vectors ETF, you can compare the effects of market volatilities on UnitedHealth Group and VanEck Vectors 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 VanEck Vectors. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and VanEck Vectors.
Diversification Opportunities for UnitedHealth Group and VanEck Vectors
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UnitedHealth and VanEck is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group Incorporate and VanEck Vectors ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Vectors ETF 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 VanEck Vectors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Vectors ETF has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and VanEck Vectors go up and down completely randomly.
Pair Corralation between UnitedHealth Group and VanEck Vectors
Assuming the 90 days trading horizon UnitedHealth Group Incorporated is expected to under-perform the VanEck Vectors. In addition to that, UnitedHealth Group is 1.49 times more volatile than VanEck Vectors ETF. It trades about -0.23 of its total potential returns per unit of risk. VanEck Vectors ETF is currently generating about -0.03 per unit of volatility. If you would invest 100,600 in VanEck Vectors ETF on December 1, 2024 and sell it today you would lose (1,556) from holding VanEck Vectors ETF or give up 1.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UnitedHealth Group Incorporate vs. VanEck Vectors ETF
Performance |
| Timeline |
| UnitedHealth Group |
| VanEck Vectors ETF |
UnitedHealth Group and VanEck Vectors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UnitedHealth Group and VanEck Vectors
The main advantage of trading using opposite UnitedHealth Group and VanEck Vectors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group position performs unexpectedly, VanEck Vectors 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 VanEck Vectors will offset losses from the drop in VanEck Vectors' long position.| UnitedHealth Group vs. Lloyds Banking Group | UnitedHealth Group vs. Air Transport Services | UnitedHealth Group vs. Capital One Financial | UnitedHealth Group vs. FibraHotel |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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