Correlation Between UnitedHealth Group and US Financial
Can any of the company-specific risk be diversified away by investing in both UnitedHealth Group and US Financial 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 US Financial 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 US Financial 15, you can compare the effects of market volatilities on UnitedHealth Group and US Financial 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 US Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and US Financial.
Diversification Opportunities for UnitedHealth Group and US Financial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between UnitedHealth and FTU-PB is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group CDR and US Financial 15 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Financial 15 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 US Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Financial 15 has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and US Financial go up and down completely randomly.
Pair Corralation between UnitedHealth Group and US Financial
Assuming the 90 days trading horizon UnitedHealth Group is expected to generate 1.21 times less return on investment than US Financial. In addition to that, UnitedHealth Group is 1.04 times more volatile than US Financial 15. It trades about 0.09 of its total potential returns per unit of risk. US Financial 15 is currently generating about 0.11 per unit of volatility. If you would invest 615.00 in US Financial 15 on August 25, 2024 and sell it today you would earn a total of 144.00 from holding US Financial 15 or generate 23.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UnitedHealth Group CDR vs. US Financial 15
Performance |
| Timeline |
| UnitedHealth Group CDR |
| US Financial 15 |
UnitedHealth Group and US Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UnitedHealth Group and US Financial
The main advantage of trading using opposite UnitedHealth Group and US Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group position performs unexpectedly, US Financial 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 US Financial will offset losses from the drop in US Financial's long position.| UnitedHealth Group vs. VentriPoint Diagnostics | UnitedHealth Group vs. CHAR Technologies | UnitedHealth Group vs. Forstrong Global Income | UnitedHealth Group vs. BMO Aggregate Bond |
| US Financial vs. North American Financial | US Financial vs. Prime Dividend Corp | US Financial vs. Canadian Life Companies | US Financial vs. Financial 15 Split |
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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