Correlation Between UnitedHealth Group and Oscar Health
Can any of the company-specific risk be diversified away by investing in both UnitedHealth Group and Oscar Health 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 Oscar Health 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 Oscar Health, you can compare the effects of market volatilities on UnitedHealth Group and Oscar Health 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 Oscar Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and Oscar Health.
Diversification Opportunities for UnitedHealth Group and Oscar Health
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UnitedHealth and Oscar is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group Incorporate and Oscar Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oscar Health 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 Oscar Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oscar Health has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and Oscar Health go up and down completely randomly.
Pair Corralation between UnitedHealth Group and Oscar Health
Considering the 90-day investment horizon UnitedHealth Group is expected to generate 6.15 times less return on investment than Oscar Health. But when comparing it to its historical volatility, UnitedHealth Group Incorporated is 2.87 times less risky than Oscar Health. It trades about 0.04 of its potential returns per unit of risk. Oscar Health is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 850.00 in Oscar Health on August 24, 2024 and sell it today you would earn a total of 781.00 from holding Oscar Health or generate 91.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UnitedHealth Group Incorporate vs. Oscar Health
Performance |
| Timeline |
| UnitedHealth Group |
| Oscar Health |
UnitedHealth Group and Oscar Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UnitedHealth Group and Oscar Health
The main advantage of trading using opposite UnitedHealth Group and Oscar Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group position performs unexpectedly, Oscar Health 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 Oscar Health will offset losses from the drop in Oscar Health's long position.| UnitedHealth Group vs. Cigna Corp | UnitedHealth Group vs. Humana Inc | UnitedHealth Group vs. Elevance Health | UnitedHealth Group vs. Centene Corp |
| Oscar Health vs. Molina Healthcare | Oscar Health vs. Centene Corp | Oscar Health vs. Elevance Health | Oscar Health vs. Clover Health Investments |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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