Correlation Between UnitedHealth Group and Gatos Silver
Can any of the company-specific risk be diversified away by investing in both UnitedHealth Group and Gatos Silver 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 Gatos Silver 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 Gatos Silver, you can compare the effects of market volatilities on UnitedHealth Group and Gatos Silver 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 Gatos Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and Gatos Silver.
Diversification Opportunities for UnitedHealth Group and Gatos Silver
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UnitedHealth and Gatos is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group CDR and Gatos Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gatos Silver 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 Gatos Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gatos Silver has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and Gatos Silver go up and down completely randomly.
Pair Corralation between UnitedHealth Group and Gatos Silver
Assuming the 90 days trading horizon UnitedHealth Group CDR is expected to generate 0.65 times more return on investment than Gatos Silver. However, UnitedHealth Group CDR is 1.54 times less risky than Gatos Silver. It trades about 0.17 of its potential returns per unit of risk. Gatos Silver is currently generating about -0.19 per unit of risk. If you would invest 2,711 in UnitedHealth Group CDR on September 2, 2024 and sell it today you would earn a total of 190.00 from holding UnitedHealth Group CDR or generate 7.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UnitedHealth Group CDR vs. Gatos Silver
Performance |
| Timeline |
| UnitedHealth Group CDR |
| Gatos Silver |
UnitedHealth Group and Gatos Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UnitedHealth Group and Gatos Silver
The main advantage of trading using opposite UnitedHealth Group and Gatos Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group position performs unexpectedly, Gatos Silver 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 Gatos Silver will offset losses from the drop in Gatos Silver's long position.| UnitedHealth Group vs. Sienna Senior Living | UnitedHealth Group vs. Chemtrade Logistics Income | 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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