Correlation Between UnitedHealth Group and ATCO
Can any of the company-specific risk be diversified away by investing in both UnitedHealth Group and ATCO 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 ATCO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UnitedHealth Group CDR and ATCO, you can compare the effects of market volatilities on UnitedHealth Group and ATCO 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 ATCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and ATCO.
Diversification Opportunities for UnitedHealth Group and ATCO
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UnitedHealth and ATCO is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group CDR and ATCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATCO 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 CDR are associated (or correlated) with ATCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATCO has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and ATCO go up and down completely randomly.
Pair Corralation between UnitedHealth Group and ATCO
Assuming the 90 days trading horizon UnitedHealth Group CDR is expected to generate 1.68 times more return on investment than ATCO. However, UnitedHealth Group is 1.68 times more volatile than ATCO. It trades about 0.17 of its potential returns per unit of risk. ATCO is currently generating about -0.07 per unit of risk. If you would invest 2,701 in UnitedHealth Group CDR on August 29, 2024 and sell it today you would earn a total of 189.00 from holding UnitedHealth Group CDR or generate 7.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UnitedHealth Group CDR vs. ATCO
Performance |
| Timeline |
| UnitedHealth Group CDR |
| ATCO |
UnitedHealth Group and ATCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UnitedHealth Group and ATCO
The main advantage of trading using opposite UnitedHealth Group and ATCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group position performs unexpectedly, ATCO 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 ATCO will offset losses from the drop in ATCO's long position.| UnitedHealth Group vs. Boat Rocker Media | UnitedHealth Group vs. Profound Medical Corp | UnitedHealth Group vs. Bip Investment Corp | UnitedHealth Group vs. Canaf Investments |
| ATCO vs. Postmedia Network Canada | ATCO vs. Datable Technology Corp | ATCO vs. Thunderbird Entertainment Group | ATCO vs. Data Communications Management |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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