Correlation Between UnitedHealth Group and Alta Copper
Can any of the company-specific risk be diversified away by investing in both UnitedHealth Group and Alta Copper 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 Alta Copper 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 Alta Copper Corp, you can compare the effects of market volatilities on UnitedHealth Group and Alta Copper 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 Alta Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and Alta Copper.
Diversification Opportunities for UnitedHealth Group and Alta Copper
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between UnitedHealth and Alta is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group CDR and Alta Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alta Copper Corp 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 Alta Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alta Copper Corp has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and Alta Copper go up and down completely randomly.
Pair Corralation between UnitedHealth Group and Alta Copper
Assuming the 90 days trading horizon UnitedHealth Group CDR is expected to generate 0.63 times more return on investment than Alta Copper. However, UnitedHealth Group CDR is 1.59 times less risky than Alta Copper. It trades about 0.14 of its potential returns per unit of risk. Alta Copper Corp is currently generating about -0.09 per unit of risk. If you would invest 2,441 in UnitedHealth Group CDR on November 4, 2024 and sell it today you would earn a total of 142.00 from holding UnitedHealth Group CDR or generate 5.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UnitedHealth Group CDR vs. Alta Copper Corp
Performance |
| Timeline |
| UnitedHealth Group CDR |
| Alta Copper Corp |
UnitedHealth Group and Alta Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UnitedHealth Group and Alta Copper
The main advantage of trading using opposite UnitedHealth Group and Alta Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group position performs unexpectedly, Alta Copper 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 Alta Copper will offset losses from the drop in Alta Copper's long position.| UnitedHealth Group vs. ESE Entertainment | UnitedHealth Group vs. Therma Bright | UnitedHealth Group vs. iShares Canadian HYBrid | UnitedHealth Group vs. Altagas Cum Red |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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