Correlation Between UnitedHealth Group and Exxon
Can any of the company-specific risk be diversified away by investing in both UnitedHealth Group and Exxon 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 Exxon 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 EXXON MOBIL CDR, you can compare the effects of market volatilities on UnitedHealth Group and Exxon 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 Exxon. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and Exxon.
Diversification Opportunities for UnitedHealth Group and Exxon
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between UnitedHealth and Exxon is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group CDR and EXXON MOBIL CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EXXON MOBIL CDR 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 Exxon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EXXON MOBIL CDR has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and Exxon go up and down completely randomly.
Pair Corralation between UnitedHealth Group and Exxon
Assuming the 90 days trading horizon UnitedHealth Group CDR is expected to generate 1.18 times more return on investment than Exxon. However, UnitedHealth Group is 1.18 times more volatile than EXXON MOBIL CDR. It trades about 0.11 of its potential returns per unit of risk. EXXON MOBIL CDR is currently generating about 0.03 per unit of risk. If you would invest 2,372 in UnitedHealth Group CDR on September 1, 2024 and sell it today you would earn a total of 529.00 from holding UnitedHealth Group CDR or generate 22.3% 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. EXXON MOBIL CDR
Performance |
| Timeline |
| UnitedHealth Group CDR |
| EXXON MOBIL CDR |
UnitedHealth Group and Exxon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UnitedHealth Group and Exxon
The main advantage of trading using opposite UnitedHealth Group and Exxon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group position performs unexpectedly, Exxon 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 Exxon will offset losses from the drop in Exxon's long position.| UnitedHealth Group vs. Exco Technologies Limited | UnitedHealth Group vs. Quorum Information Technologies | UnitedHealth Group vs. Rogers Communications | UnitedHealth Group vs. Ocumetics Technology Corp |
| Exxon vs. Orbit Garant Drilling | Exxon vs. US Financial 15 | Exxon vs. Financial 15 Split | Exxon vs. First National Financial |
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.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |