Correlation Between UnitedHealth Group and Marvell Technology
Can any of the company-specific risk be diversified away by investing in both UnitedHealth Group and Marvell Technology 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 Marvell Technology 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 Marvell Technology, you can compare the effects of market volatilities on UnitedHealth Group and Marvell Technology 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 Marvell Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and Marvell Technology.
Diversification Opportunities for UnitedHealth Group and Marvell Technology
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UnitedHealth and Marvell is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group Incorporate and Marvell Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marvell Technology 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 Marvell Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marvell Technology has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and Marvell Technology go up and down completely randomly.
Pair Corralation between UnitedHealth Group and Marvell Technology
Assuming the 90 days trading horizon UnitedHealth Group Incorporated is expected to generate 0.79 times more return on investment than Marvell Technology. However, UnitedHealth Group Incorporated is 1.27 times less risky than Marvell Technology. It trades about 0.14 of its potential returns per unit of risk. Marvell Technology is currently generating about -0.13 per unit of risk. If you would invest 4,412 in UnitedHealth Group Incorporated on October 17, 2024 and sell it today you would earn a total of 276.00 from holding UnitedHealth Group Incorporated or generate 6.26% 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. Marvell Technology
Performance |
| Timeline |
| UnitedHealth Group |
| Marvell Technology |
UnitedHealth Group and Marvell Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UnitedHealth Group and Marvell Technology
The main advantage of trading using opposite UnitedHealth Group and Marvell Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group position performs unexpectedly, Marvell Technology 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 Marvell Technology will offset losses from the drop in Marvell Technology's long position.| UnitedHealth Group vs. Delta Air Lines | UnitedHealth Group vs. Alaska Air Group, | UnitedHealth Group vs. Ryanair Holdings plc | UnitedHealth Group vs. MAHLE Metal Leve |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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