Correlation Between UnitedHealth Group and Emera Pref
Can any of the company-specific risk be diversified away by investing in both UnitedHealth Group and Emera Pref 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 Emera Pref 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 Emera Pref A, you can compare the effects of market volatilities on UnitedHealth Group and Emera Pref 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 Emera Pref. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and Emera Pref.
Diversification Opportunities for UnitedHealth Group and Emera Pref
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UnitedHealth and Emera is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group CDR and Emera Pref A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emera Pref A 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 Emera Pref. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emera Pref A has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and Emera Pref go up and down completely randomly.
Pair Corralation between UnitedHealth Group and Emera Pref
Assuming the 90 days trading horizon UnitedHealth Group is expected to generate 2.95 times less return on investment than Emera Pref. In addition to that, UnitedHealth Group is 2.52 times more volatile than Emera Pref A. It trades about 0.07 of its total potential returns per unit of risk. Emera Pref A is currently generating about 0.55 per unit of volatility. If you would invest 1,615 in Emera Pref A on October 25, 2024 and sell it today you would earn a total of 145.00 from holding Emera Pref A or generate 8.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
UnitedHealth Group CDR vs. Emera Pref A
Performance |
| Timeline |
| UnitedHealth Group CDR |
| Emera Pref A |
UnitedHealth Group and Emera Pref Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UnitedHealth Group and Emera Pref
The main advantage of trading using opposite UnitedHealth Group and Emera Pref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group position performs unexpectedly, Emera Pref 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 Emera Pref will offset losses from the drop in Emera Pref's long position.| UnitedHealth Group vs. Calibre Mining Corp | UnitedHealth Group vs. Advent Wireless | UnitedHealth Group vs. Nano One Materials | UnitedHealth Group vs. Leading Edge Materials |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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