Correlation Between UnitedHealth Group and Shawcor
Can any of the company-specific risk be diversified away by investing in both UnitedHealth Group and Shawcor 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 Shawcor 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 Shawcor, you can compare the effects of market volatilities on UnitedHealth Group and Shawcor 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 Shawcor. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and Shawcor.
Diversification Opportunities for UnitedHealth Group and Shawcor
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between UnitedHealth and Shawcor is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group CDR and Shawcor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shawcor 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 Shawcor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shawcor has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and Shawcor go up and down completely randomly.
Pair Corralation between UnitedHealth Group and Shawcor
Assuming the 90 days trading horizon UnitedHealth Group CDR is expected to generate 0.82 times more return on investment than Shawcor. However, UnitedHealth Group CDR is 1.21 times less risky than Shawcor. It trades about -0.25 of its potential returns per unit of risk. Shawcor is currently generating about -0.23 per unit of risk. If you would invest 2,924 in UnitedHealth Group CDR on September 13, 2024 and sell it today you would lose (381.00) from holding UnitedHealth Group CDR or give up 13.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
UnitedHealth Group CDR vs. Shawcor
Performance |
| Timeline |
| UnitedHealth Group CDR |
| Shawcor |
UnitedHealth Group and Shawcor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UnitedHealth Group and Shawcor
The main advantage of trading using opposite UnitedHealth Group and Shawcor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group position performs unexpectedly, Shawcor 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 Shawcor will offset losses from the drop in Shawcor's long position.| UnitedHealth Group vs. Extendicare | UnitedHealth Group vs. Sienna Senior Living | UnitedHealth Group vs. Rogers Sugar | UnitedHealth Group vs. Chemtrade Logistics Income |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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