Correlation Between UnitedHealth Group and Xtract One
Can any of the company-specific risk be diversified away by investing in both UnitedHealth Group and Xtract 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 Xtract 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 Xtract One Technologies, you can compare the effects of market volatilities on UnitedHealth Group and Xtract 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 Xtract One. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and Xtract One.
Diversification Opportunities for UnitedHealth Group and Xtract One
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between UnitedHealth and Xtract is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group CDR and Xtract One Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtract One Technologies 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 Xtract One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtract One Technologies has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and Xtract One go up and down completely randomly.
Pair Corralation between UnitedHealth Group and Xtract One
Assuming the 90 days trading horizon UnitedHealth Group CDR is expected to generate 0.45 times more return on investment than Xtract One. However, UnitedHealth Group CDR is 2.24 times less risky than Xtract One. It trades about 0.05 of its potential returns per unit of risk. Xtract One Technologies is currently generating about -0.01 per unit of risk. If you would invest 2,335 in UnitedHealth Group CDR on September 2, 2024 and sell it today you would earn a total of 566.00 from holding UnitedHealth Group CDR or generate 24.24% 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. Xtract One Technologies
Performance |
| Timeline |
| UnitedHealth Group CDR |
| Xtract One Technologies |
UnitedHealth Group and Xtract One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UnitedHealth Group and Xtract One
The main advantage of trading using opposite UnitedHealth Group and Xtract One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group position performs unexpectedly, Xtract 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 Xtract One will offset losses from the drop in Xtract One's long position.| UnitedHealth Group vs. Extendicare | UnitedHealth Group vs. Sienna Senior Living | UnitedHealth Group vs. Chemtrade Logistics Income | UnitedHealth Group vs. iShares Canadian HYBrid |
| Xtract One vs. Millennium Silver Corp | Xtract One vs. Costco Wholesale Corp | Xtract One vs. Faction Investment Group | Xtract One vs. Perseus Mining |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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