Correlation Between UNITEDHEALTH and Balchem
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By analyzing existing cross correlation between UNITEDHEALTH GROUP INC and Balchem, you can compare the effects of market volatilities on UNITEDHEALTH and Balchem 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 with a short position of Balchem. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNITEDHEALTH and Balchem.
Diversification Opportunities for UNITEDHEALTH and Balchem
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between UNITEDHEALTH and Balchem is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding UNITEDHEALTH GROUP INC and Balchem in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balchem and UNITEDHEALTH 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 INC are associated (or correlated) with Balchem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balchem has no effect on the direction of UNITEDHEALTH i.e., UNITEDHEALTH and Balchem go up and down completely randomly.
Pair Corralation between UNITEDHEALTH and Balchem
Assuming the 90 days trading horizon UNITEDHEALTH GROUP INC is expected to generate 1.1 times more return on investment than Balchem. However, UNITEDHEALTH is 1.1 times more volatile than Balchem. It trades about 0.25 of its potential returns per unit of risk. Balchem is currently generating about 0.06 per unit of risk. If you would invest 8,161 in UNITEDHEALTH GROUP INC on December 16, 2024 and sell it today you would earn a total of 643.00 from holding UNITEDHEALTH GROUP INC or generate 7.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 85.71% |
| Values | Daily Returns |
UNITEDHEALTH GROUP INC vs. Balchem
Performance |
| Timeline |
| UNITEDHEALTH GROUP INC |
| Balchem |
UNITEDHEALTH and Balchem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNITEDHEALTH and Balchem
The main advantage of trading using opposite UNITEDHEALTH and Balchem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNITEDHEALTH position performs unexpectedly, Balchem 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 Balchem will offset losses from the drop in Balchem's long position.| UNITEDHEALTH vs. Vishay Intertechnology | ||
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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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