Correlation Between UnitedHealth Group and Emera Srs
Can any of the company-specific risk be diversified away by investing in both UnitedHealth Group and Emera Srs 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 Srs 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 Srs C, you can compare the effects of market volatilities on UnitedHealth Group and Emera Srs 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 Srs. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and Emera Srs.
Diversification Opportunities for UnitedHealth Group and Emera Srs
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UnitedHealth and Emera is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group CDR and Emera Srs C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emera Srs C 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 Srs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emera Srs C has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and Emera Srs go up and down completely randomly.
Pair Corralation between UnitedHealth Group and Emera Srs
Assuming the 90 days trading horizon UnitedHealth Group CDR is expected to under-perform the Emera Srs. In addition to that, UnitedHealth Group is 2.58 times more volatile than Emera Srs C. It trades about -0.01 of its total potential returns per unit of risk. Emera Srs C is currently generating about 0.11 per unit of volatility. If you would invest 2,170 in Emera Srs C on November 3, 2024 and sell it today you would earn a total of 206.00 from holding Emera Srs C or generate 9.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UnitedHealth Group CDR vs. Emera Srs C
Performance |
| Timeline |
| UnitedHealth Group CDR |
| Emera Srs C |
UnitedHealth Group and Emera Srs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UnitedHealth Group and Emera Srs
The main advantage of trading using opposite UnitedHealth Group and Emera Srs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group position performs unexpectedly, Emera Srs 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 Srs will offset losses from the drop in Emera Srs' long position.| UnitedHealth Group vs. Dynacor Gold Mines | UnitedHealth Group vs. Sangoma Technologies Corp | UnitedHealth Group vs. Geodrill Limited | UnitedHealth Group vs. Biosyent |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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