Correlation Between UnitedHealth Group and National Bank
Can any of the company-specific risk be diversified away by investing in both UnitedHealth Group and National Bank 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 National Bank 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 National Bank of, you can compare the effects of market volatilities on UnitedHealth Group and National Bank 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 National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and National Bank.
Diversification Opportunities for UnitedHealth Group and National Bank
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between UnitedHealth and National is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group CDR and National Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank 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 National Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bank has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and National Bank go up and down completely randomly.
Pair Corralation between UnitedHealth Group and National Bank
Assuming the 90 days trading horizon UnitedHealth Group CDR is expected to under-perform the National Bank. In addition to that, UnitedHealth Group is 2.78 times more volatile than National Bank of. It trades about -0.01 of its total potential returns per unit of risk. National Bank of is currently generating about 0.14 per unit of volatility. If you would invest 1,842 in National Bank of on November 27, 2024 and sell it today you would earn a total of 800.00 from holding National Bank of or generate 43.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UnitedHealth Group CDR vs. National Bank of
Performance |
| Timeline |
| UnitedHealth Group CDR |
| National Bank |
UnitedHealth Group and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UnitedHealth Group and National Bank
The main advantage of trading using opposite UnitedHealth Group and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group position performs unexpectedly, National Bank 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 National Bank will offset losses from the drop in National Bank's long position.| UnitedHealth Group vs. East Side Games | UnitedHealth Group vs. Sun Peak Metals | UnitedHealth Group vs. Economic Investment Trust | UnitedHealth Group vs. South Pacific Metals |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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