Correlation Between UnitedHealth Group and UnitedHealth Group
Can any of the company-specific risk be diversified away by investing in both UnitedHealth Group and UnitedHealth Group 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 UnitedHealth Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UnitedHealth Group Incorporated and UnitedHealth Group Incorporated, you can compare the effects of market volatilities on UnitedHealth Group and UnitedHealth Group 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 UnitedHealth Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and UnitedHealth Group.
Diversification Opportunities for UnitedHealth Group and UnitedHealth Group
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between UnitedHealth and UnitedHealth is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group Incorporate and UnitedHealth Group Incorporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UnitedHealth Group 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 Incorporated are associated (or correlated) with UnitedHealth Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UnitedHealth Group has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and UnitedHealth Group go up and down completely randomly.
Pair Corralation between UnitedHealth Group and UnitedHealth Group
Assuming the 90 days trading horizon UnitedHealth Group Incorporated is expected to generate 0.99 times more return on investment than UnitedHealth Group. However, UnitedHealth Group Incorporated is 1.01 times less risky than UnitedHealth Group. It trades about 0.19 of its potential returns per unit of risk. UnitedHealth Group Incorporated is currently generating about 0.1 per unit of risk. If you would invest 49,790 in UnitedHealth Group Incorporated on November 6, 2024 and sell it today you would earn a total of 3,590 from holding UnitedHealth Group Incorporated or generate 7.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
UnitedHealth Group Incorporate vs. UnitedHealth Group Incorporate
Performance |
| Timeline |
| UnitedHealth Group |
| UnitedHealth Group |
UnitedHealth Group and UnitedHealth Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UnitedHealth Group and UnitedHealth Group
The main advantage of trading using opposite UnitedHealth Group and UnitedHealth Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group position performs unexpectedly, UnitedHealth Group 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 UnitedHealth Group will offset losses from the drop in UnitedHealth Group's long position.| UnitedHealth Group vs. STMICROELECTRONICS | UnitedHealth Group vs. Renesas Electronics | UnitedHealth Group vs. TT Electronics PLC | UnitedHealth Group vs. Methode Electronics |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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