Correlation Between UNITEDHEALTH and 00108WAF7
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By analyzing existing cross correlation between UNITEDHEALTH GROUP INC and AEP TEX INC, you can compare the effects of market volatilities on UNITEDHEALTH and 00108WAF7 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 00108WAF7. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNITEDHEALTH and 00108WAF7.
Diversification Opportunities for UNITEDHEALTH and 00108WAF7
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between UNITEDHEALTH and 00108WAF7 is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding UNITEDHEALTH GROUP INC and AEP TEX INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEP TEX INC 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 00108WAF7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEP TEX INC has no effect on the direction of UNITEDHEALTH i.e., UNITEDHEALTH and 00108WAF7 go up and down completely randomly.
Pair Corralation between UNITEDHEALTH and 00108WAF7
Assuming the 90 days trading horizon UNITEDHEALTH GROUP INC is expected to generate 0.7 times more return on investment than 00108WAF7. However, UNITEDHEALTH GROUP INC is 1.43 times less risky than 00108WAF7. It trades about 0.18 of its potential returns per unit of risk. AEP TEX INC is currently generating about 0.02 per unit of risk. If you would invest 8,528 in UNITEDHEALTH GROUP INC on December 16, 2024 and sell it today you would earn a total of 627.00 from holding UNITEDHEALTH GROUP INC or generate 7.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 76.19% |
| Values | Daily Returns |
UNITEDHEALTH GROUP INC vs. AEP TEX INC
Performance |
| Timeline |
| UNITEDHEALTH GROUP INC |
| AEP TEX INC |
UNITEDHEALTH and 00108WAF7 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNITEDHEALTH and 00108WAF7
The main advantage of trading using opposite UNITEDHEALTH and 00108WAF7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNITEDHEALTH position performs unexpectedly, 00108WAF7 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 00108WAF7 will offset losses from the drop in 00108WAF7's long position.| UNITEDHEALTH vs. AEP TEX INC | ||
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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