Correlation Between UnitedHealth Group and Zoom Video
Can any of the company-specific risk be diversified away by investing in both UnitedHealth Group and Zoom Video 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 Zoom Video 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 Zoom Video Communications, you can compare the effects of market volatilities on UnitedHealth Group and Zoom Video 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 Zoom Video. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and Zoom Video.
Diversification Opportunities for UnitedHealth Group and Zoom Video
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between UnitedHealth and Zoom is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group Incorporate and Zoom Video Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoom Video Communications 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 Zoom Video. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoom Video Communications has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and Zoom Video go up and down completely randomly.
Pair Corralation between UnitedHealth Group and Zoom Video
Assuming the 90 days trading horizon UnitedHealth Group is expected to generate 1.26 times less return on investment than Zoom Video. But when comparing it to its historical volatility, UnitedHealth Group Incorporated is 1.41 times less risky than Zoom Video. It trades about 0.27 of its potential returns per unit of risk. Zoom Video Communications is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,750 in Zoom Video Communications on August 30, 2024 and sell it today you would earn a total of 258.00 from holding Zoom Video Communications or generate 14.74% 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. Zoom Video Communications
Performance |
| Timeline |
| UnitedHealth Group |
| Zoom Video Communications |
UnitedHealth Group and Zoom Video Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UnitedHealth Group and Zoom Video
The main advantage of trading using opposite UnitedHealth Group and Zoom Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group position performs unexpectedly, Zoom Video 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 Zoom Video will offset losses from the drop in Zoom Video's long position.| UnitedHealth Group vs. Odontoprev SA | UnitedHealth Group vs. Qualicorp Consultoria e | UnitedHealth Group vs. Energisa SA | UnitedHealth Group vs. BTG Pactual Logstica |
| Zoom Video vs. The Home Depot | Zoom Video vs. United States Steel | Zoom Video vs. Brpr Corporate Offices | Zoom Video vs. STMicroelectronics NV |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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