Correlation Between UnitedHealth Group and Adobe
Can any of the company-specific risk be diversified away by investing in both UnitedHealth Group and Adobe 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 Adobe 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 Adobe Inc, you can compare the effects of market volatilities on UnitedHealth Group and Adobe 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 Adobe. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and Adobe.
Diversification Opportunities for UnitedHealth Group and Adobe
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between UnitedHealth and Adobe is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group Incorporate and Adobe Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adobe Inc 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 Adobe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adobe Inc has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and Adobe go up and down completely randomly.
Pair Corralation between UnitedHealth Group and Adobe
Assuming the 90 days trading horizon UnitedHealth Group Incorporated is expected to generate 0.99 times more return on investment than Adobe. However, UnitedHealth Group Incorporated is 1.01 times less risky than Adobe. It trades about 0.03 of its potential returns per unit of risk. Adobe Inc is currently generating about -0.22 per unit of risk. If you would invest 4,533 in UnitedHealth Group Incorporated on October 25, 2024 and sell it today you would earn a total of 34.00 from holding UnitedHealth Group Incorporated or generate 0.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UnitedHealth Group Incorporate vs. Adobe Inc
Performance |
| Timeline |
| UnitedHealth Group |
| Adobe Inc |
UnitedHealth Group and Adobe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UnitedHealth Group and Adobe
The main advantage of trading using opposite UnitedHealth Group and Adobe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group position performs unexpectedly, Adobe 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 Adobe will offset losses from the drop in Adobe's long position.| UnitedHealth Group vs. Autohome | UnitedHealth Group vs. Align Technology | UnitedHealth Group vs. United Airlines Holdings | UnitedHealth Group vs. United Rentals |
| Adobe vs. Seagate Technology Holdings | Adobe vs. Liberty Broadband | Adobe vs. Metalrgica Riosulense SA | Adobe vs. Cognizant Technology Solutions |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| CEOs Directory Screen CEOs from public companies around the world |