Correlation Between UnitedHealth Group and Sangoma Technologies
Can any of the company-specific risk be diversified away by investing in both UnitedHealth Group and Sangoma Technologies 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 Sangoma Technologies 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 Sangoma Technologies Corp, you can compare the effects of market volatilities on UnitedHealth Group and Sangoma Technologies 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 Sangoma Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and Sangoma Technologies.
Diversification Opportunities for UnitedHealth Group and Sangoma Technologies
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between UnitedHealth and Sangoma is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group CDR and Sangoma Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangoma Technologies Corp 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 Sangoma Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangoma Technologies Corp has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and Sangoma Technologies go up and down completely randomly.
Pair Corralation between UnitedHealth Group and Sangoma Technologies
Assuming the 90 days trading horizon UnitedHealth Group CDR is expected to under-perform the Sangoma Technologies. In addition to that, UnitedHealth Group is 1.11 times more volatile than Sangoma Technologies Corp. It trades about -0.25 of its total potential returns per unit of risk. Sangoma Technologies Corp is currently generating about 0.14 per unit of volatility. If you would invest 887.00 in Sangoma Technologies Corp on September 13, 2024 and sell it today you would earn a total of 57.00 from holding Sangoma Technologies Corp or generate 6.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UnitedHealth Group CDR vs. Sangoma Technologies Corp
Performance |
| Timeline |
| UnitedHealth Group CDR |
| Sangoma Technologies Corp |
UnitedHealth Group and Sangoma Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UnitedHealth Group and Sangoma Technologies
The main advantage of trading using opposite UnitedHealth Group and Sangoma Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group position performs unexpectedly, Sangoma Technologies 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 Sangoma Technologies will offset losses from the drop in Sangoma Technologies' 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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