Correlation Between UnitedHealth Group and JPMorgan Chase
Can any of the company-specific risk be diversified away by investing in both UnitedHealth Group and JPMorgan Chase 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 JPMorgan Chase 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 JPMorgan Chase Co, you can compare the effects of market volatilities on UnitedHealth Group and JPMorgan Chase 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 JPMorgan Chase. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and JPMorgan Chase.
Diversification Opportunities for UnitedHealth Group and JPMorgan Chase
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between UnitedHealth and JPMorgan is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group Incorporate and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase 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 JPMorgan Chase. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Chase has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and JPMorgan Chase go up and down completely randomly.
Pair Corralation between UnitedHealth Group and JPMorgan Chase
Assuming the 90 days trading horizon UnitedHealth Group is expected to generate 2.95 times less return on investment than JPMorgan Chase. In addition to that, UnitedHealth Group is 1.19 times more volatile than JPMorgan Chase Co. It trades about 0.03 of its total potential returns per unit of risk. JPMorgan Chase Co is currently generating about 0.1 per unit of volatility. If you would invest 241,482 in JPMorgan Chase Co on September 5, 2024 and sell it today you would earn a total of 258,518 from holding JPMorgan Chase Co or generate 107.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UnitedHealth Group Incorporate vs. JPMorgan Chase Co
Performance |
| Timeline |
| UnitedHealth Group |
| JPMorgan Chase |
UnitedHealth Group and JPMorgan Chase Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UnitedHealth Group and JPMorgan Chase
The main advantage of trading using opposite UnitedHealth Group and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group position performs unexpectedly, JPMorgan Chase 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 JPMorgan Chase will offset losses from the drop in JPMorgan Chase's long position.| UnitedHealth Group vs. The Select Sector | UnitedHealth Group vs. Promotora y Operadora | UnitedHealth Group vs. SPDR Series Trust | UnitedHealth Group vs. Vanguard World |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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