Correlation Between UnitedHealth Group and IShares Trust
Can any of the company-specific risk be diversified away by investing in both UnitedHealth Group and IShares 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 IShares 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 iShares Trust , you can compare the effects of market volatilities on UnitedHealth Group and IShares 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 IShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and IShares Trust.
Diversification Opportunities for UnitedHealth Group and IShares Trust
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between UnitedHealth and IShares is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group Incorporate and iShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares 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 IShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Trust has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and IShares Trust go up and down completely randomly.
Pair Corralation between UnitedHealth Group and IShares Trust
Assuming the 90 days trading horizon UnitedHealth Group Incorporated is expected to generate 0.36 times more return on investment than IShares Trust. However, UnitedHealth Group Incorporated is 2.78 times less risky than IShares Trust. It trades about 0.07 of its potential returns per unit of risk. iShares 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 Together |
| Strength | Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
UnitedHealth Group Incorporate vs. iShares Trust
Performance |
| Timeline |
| UnitedHealth Group |
| iShares Trust |
UnitedHealth Group and IShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UnitedHealth Group and IShares Trust
The main advantage of trading using opposite UnitedHealth Group and IShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group position performs unexpectedly, IShares 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 IShares Trust will offset losses from the drop in IShares 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 |
| IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust | IShares Trust vs. iShares 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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