Correlation Between UnitedHealth Group and Highway 50
Can any of the company-specific risk be diversified away by investing in both UnitedHealth Group and Highway 50 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 Highway 50 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 Highway 50 Gold, you can compare the effects of market volatilities on UnitedHealth Group and Highway 50 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 Highway 50. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and Highway 50.
Diversification Opportunities for UnitedHealth Group and Highway 50
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between UnitedHealth and Highway is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group CDR and Highway 50 Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highway 50 Gold 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 Highway 50. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highway 50 Gold has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and Highway 50 go up and down completely randomly.
Pair Corralation between UnitedHealth Group and Highway 50
Assuming the 90 days trading horizon UnitedHealth Group CDR is expected to generate 0.36 times more return on investment than Highway 50. However, UnitedHealth Group CDR is 2.81 times less risky than Highway 50. It trades about -0.2 of its potential returns per unit of risk. Highway 50 Gold is currently generating about -0.35 per unit of risk. If you would invest 2,972 in UnitedHealth Group CDR on September 12, 2024 and sell it today you would lose (274.00) from holding UnitedHealth Group CDR or give up 9.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UnitedHealth Group CDR vs. Highway 50 Gold
Performance |
| Timeline |
| UnitedHealth Group CDR |
| Highway 50 Gold |
UnitedHealth Group and Highway 50 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UnitedHealth Group and Highway 50
The main advantage of trading using opposite UnitedHealth Group and Highway 50 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group position performs unexpectedly, Highway 50 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 Highway 50 will offset losses from the drop in Highway 50's long position.| UnitedHealth Group vs. Premium Income | UnitedHealth Group vs. E L Financial Corp | UnitedHealth Group vs. Fairfax Financial Holdings | UnitedHealth Group vs. Fairfax Fin Hld |
| Highway 50 vs. Sangoma Technologies Corp | Highway 50 vs. AGF Management Limited | Highway 50 vs. Exco Technologies Limited | Highway 50 vs. Nova Leap Health |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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