Correlation Between UnitedHealth Group and Nano One
Can any of the company-specific risk be diversified away by investing in both UnitedHealth Group and Nano One 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 Nano One 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 Nano One Materials, you can compare the effects of market volatilities on UnitedHealth Group and Nano One 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 Nano One. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and Nano One.
Diversification Opportunities for UnitedHealth Group and Nano One
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UnitedHealth and Nano is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group CDR and Nano One Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nano One Materials 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 Nano One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nano One Materials has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and Nano One go up and down completely randomly.
Pair Corralation between UnitedHealth Group and Nano One
Assuming the 90 days trading horizon UnitedHealth Group CDR is expected to under-perform the Nano One. But the stock apears to be less risky and, when comparing its historical volatility, UnitedHealth Group CDR is 2.34 times less risky than Nano One. The stock trades about -0.2 of its potential returns per unit of risk. The Nano One Materials is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 100.00 in Nano One Materials on September 12, 2024 and sell it today you would earn a total of 1.00 from holding Nano One Materials or generate 1.0% 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. Nano One Materials
Performance |
| Timeline |
| UnitedHealth Group CDR |
| Nano One Materials |
UnitedHealth Group and Nano One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UnitedHealth Group and Nano One
The main advantage of trading using opposite UnitedHealth Group and Nano One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group position performs unexpectedly, Nano One 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 Nano One will offset losses from the drop in Nano One'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 |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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