Correlation Between UnitedHealth Group and Trade Desk
Can any of the company-specific risk be diversified away by investing in both UnitedHealth Group and Trade Desk 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 Trade Desk 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 The Trade Desk, you can compare the effects of market volatilities on UnitedHealth Group and Trade Desk 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 Trade Desk. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and Trade Desk.
Diversification Opportunities for UnitedHealth Group and Trade Desk
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between UnitedHealth and Trade is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group Incorporate and The Trade Desk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trade Desk 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 Trade Desk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trade Desk has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and Trade Desk go up and down completely randomly.
Pair Corralation between UnitedHealth Group and Trade Desk
Assuming the 90 days trading horizon UnitedHealth Group Incorporated is expected to generate 0.37 times more return on investment than Trade Desk. However, UnitedHealth Group Incorporated is 2.73 times less risky than Trade Desk. It trades about -0.03 of its potential returns per unit of risk. The Trade Desk is currently generating about -0.05 per unit of risk. If you would invest 4,533 in UnitedHealth Group Incorporated on October 26, 2024 and sell it today you would lose (72.00) from holding UnitedHealth Group Incorporated or give up 1.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UnitedHealth Group Incorporate vs. The Trade Desk
Performance |
| Timeline |
| UnitedHealth Group |
| Trade Desk |
UnitedHealth Group and Trade Desk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UnitedHealth Group and Trade Desk
The main advantage of trading using opposite UnitedHealth Group and Trade Desk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group position performs unexpectedly, Trade Desk 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 Trade Desk will offset losses from the drop in Trade Desk's long position.| UnitedHealth Group vs. MAHLE Metal Leve | UnitedHealth Group vs. Public Storage | UnitedHealth Group vs. Broadcom | UnitedHealth Group vs. ON Semiconductor |
| Trade Desk vs. Electronic Arts | Trade Desk vs. Global X Funds | Trade Desk vs. STMicroelectronics NV | Trade Desk vs. Melco Resorts Entertainment |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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