Correlation Between UnitedHealth Group and International Metals
Can any of the company-specific risk be diversified away by investing in both UnitedHealth Group and International Metals 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 International Metals 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 International Metals Mining, you can compare the effects of market volatilities on UnitedHealth Group and International Metals 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 International Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and International Metals.
Diversification Opportunities for UnitedHealth Group and International Metals
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between UnitedHealth and International is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group CDR and International Metals Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Metals 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 International Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Metals has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and International Metals go up and down completely randomly.
Pair Corralation between UnitedHealth Group and International Metals
Assuming the 90 days trading horizon UnitedHealth Group CDR is expected to generate 0.43 times more return on investment than International Metals. However, UnitedHealth Group CDR is 2.32 times less risky than International Metals. It trades about -0.01 of its potential returns per unit of risk. International Metals Mining is currently generating about -0.05 per unit of risk. If you would invest 2,543 in UnitedHealth Group CDR on October 12, 2024 and sell it today you would lose (23.00) from holding UnitedHealth Group CDR or give up 0.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
UnitedHealth Group CDR vs. International Metals Mining
Performance |
| Timeline |
| UnitedHealth Group CDR |
| International Metals |
UnitedHealth Group and International Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UnitedHealth Group and International Metals
The main advantage of trading using opposite UnitedHealth Group and International Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group position performs unexpectedly, International Metals 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 International Metals will offset losses from the drop in International Metals' long position.| UnitedHealth Group vs. Leons Furniture Limited | UnitedHealth Group vs. Rogers Communications | UnitedHealth Group vs. Economic Investment Trust | UnitedHealth Group vs. Bausch Health Companies |
| International Metals vs. Verizon Communications CDR | International Metals vs. Nova Leap Health | International Metals vs. Champion Iron | International Metals vs. UnitedHealth Group CDR |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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