Correlation Between UnitedHealth Group and Palantir Technologies
Can any of the company-specific risk be diversified away by investing in both UnitedHealth Group and Palantir Technologies 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 Palantir Technologies 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 Palantir Technologies, you can compare the effects of market volatilities on UnitedHealth Group and Palantir Technologies 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 Palantir Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and Palantir Technologies.
Diversification Opportunities for UnitedHealth Group and Palantir Technologies
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between UnitedHealth and Palantir is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group Incorporate and Palantir Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palantir 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 Incorporated are associated (or correlated) with Palantir Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palantir Technologies has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and Palantir Technologies go up and down completely randomly.
Pair Corralation between UnitedHealth Group and Palantir Technologies
Assuming the 90 days trading horizon UnitedHealth Group is expected to generate 14.95 times less return on investment than Palantir Technologies. But when comparing it to its historical volatility, UnitedHealth Group Incorporated is 1.84 times less risky than Palantir Technologies. It trades about 0.03 of its potential returns per unit of risk. Palantir Technologies is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 7,895 in Palantir Technologies on October 17, 2024 and sell it today you would earn a total of 5,305 from holding Palantir Technologies or generate 67.19% 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. Palantir Technologies
Performance |
| Timeline |
| UnitedHealth Group |
| Palantir Technologies |
UnitedHealth Group and Palantir Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UnitedHealth Group and Palantir Technologies
The main advantage of trading using opposite UnitedHealth Group and Palantir Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group position performs unexpectedly, Palantir Technologies 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 Palantir Technologies will offset losses from the drop in Palantir Technologies' 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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