Correlation Between UnitedHealth Group and CNJ Capital
Can any of the company-specific risk be diversified away by investing in both UnitedHealth Group and CNJ Capital 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 CNJ Capital 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 CNJ Capital Investments, you can compare the effects of market volatilities on UnitedHealth Group and CNJ Capital 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 CNJ Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and CNJ Capital.
Diversification Opportunities for UnitedHealth Group and CNJ Capital
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between UnitedHealth and CNJ is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group CDR and CNJ Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNJ Capital Investments 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 CNJ Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNJ Capital Investments has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and CNJ Capital go up and down completely randomly.
Pair Corralation between UnitedHealth Group and CNJ Capital
Assuming the 90 days trading horizon UnitedHealth Group is expected to generate 13.65 times less return on investment than CNJ Capital. But when comparing it to its historical volatility, UnitedHealth Group CDR is 3.1 times less risky than CNJ Capital. It trades about 0.02 of its potential returns per unit of risk. CNJ Capital Investments is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 15.00 in CNJ Capital Investments on October 11, 2024 and sell it today you would earn a total of 31.00 from holding CNJ Capital Investments or generate 206.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 78.34% |
| Values | Daily Returns |
UnitedHealth Group CDR vs. CNJ Capital Investments
Performance |
| Timeline |
| UnitedHealth Group CDR |
| CNJ Capital Investments |
UnitedHealth Group and CNJ Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UnitedHealth Group and CNJ Capital
The main advantage of trading using opposite UnitedHealth Group and CNJ Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group position performs unexpectedly, CNJ Capital 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 CNJ Capital will offset losses from the drop in CNJ Capital's long position.| UnitedHealth Group vs. Canaf Investments | UnitedHealth Group vs. Diversified Royalty Corp | UnitedHealth Group vs. Definity Financial Corp | UnitedHealth Group vs. Labrador Iron Ore |
| CNJ Capital vs. Andlauer Healthcare Gr | CNJ Capital vs. Brookfield Office Properties | CNJ Capital vs. UnitedHealth Group CDR | CNJ Capital vs. Advent Wireless |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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