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
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between UnitedHealth and ProShares is 0.49. 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 is expected to generate 1.38 times less return on investment than ProShares Trust. But when comparing it to its historical volatility, UnitedHealth Group Incorporated is 1.33 times less risky than ProShares Trust. It trades about 0.07 of its potential returns per unit of risk. ProShares Trust is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 58,745 in ProShares Trust on August 31, 2024 and sell it today you would earn a total of 41,255 from holding ProShares Trust or generate 70.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.73% |
| 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. The Select Sector | UnitedHealth Group vs. Promotora y Operadora | UnitedHealth Group vs. SPDR Series Trust | UnitedHealth Group vs. iShares Trust |
| ProShares Trust vs. Promotora y Operadora | ProShares Trust vs. UnitedHealth Group Incorporated | ProShares Trust vs. Qulitas Controladora SAB | ProShares Trust vs. Hoteles City Express |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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