Correlation Between UnitedHealth Group and HLS Therapeutics
Can any of the company-specific risk be diversified away by investing in both UnitedHealth Group and HLS Therapeutics 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 HLS Therapeutics 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 HLS Therapeutics, you can compare the effects of market volatilities on UnitedHealth Group and HLS Therapeutics 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 HLS Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and HLS Therapeutics.
Diversification Opportunities for UnitedHealth Group and HLS Therapeutics
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UnitedHealth and HLS is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group CDR and HLS Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HLS Therapeutics 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 HLS Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HLS Therapeutics has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and HLS Therapeutics go up and down completely randomly.
Pair Corralation between UnitedHealth Group and HLS Therapeutics
Assuming the 90 days trading horizon UnitedHealth Group CDR is expected to generate 1.25 times more return on investment than HLS Therapeutics. However, UnitedHealth Group is 1.25 times more volatile than HLS Therapeutics. It trades about 0.14 of its potential returns per unit of risk. HLS Therapeutics is currently generating about 0.05 per unit of risk. If you would invest 2,441 in UnitedHealth Group CDR on November 4, 2024 and sell it today you would earn a total of 142.00 from holding UnitedHealth Group CDR or generate 5.82% 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. HLS Therapeutics
Performance |
| Timeline |
| UnitedHealth Group CDR |
| HLS Therapeutics |
UnitedHealth Group and HLS Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UnitedHealth Group and HLS Therapeutics
The main advantage of trading using opposite UnitedHealth Group and HLS Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group position performs unexpectedly, HLS Therapeutics 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 HLS Therapeutics will offset losses from the drop in HLS Therapeutics' long position.| UnitedHealth Group vs. ESE Entertainment | UnitedHealth Group vs. Therma Bright | UnitedHealth Group vs. iShares Canadian HYBrid | UnitedHealth Group vs. Altagas Cum Red |
| HLS Therapeutics vs. Profound Medical Corp | HLS Therapeutics vs. Medicenna Therapeutics Corp | HLS Therapeutics vs. Knight Therapeutics | HLS Therapeutics vs. Aptose Biosciences |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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