Correlation Between UNITEDHEALTH and Dow Jones
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By analyzing existing cross correlation between UNITEDHEALTH GROUP INC and Dow Jones Industrial, you can compare the effects of market volatilities on UNITEDHEALTH and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNITEDHEALTH and Dow Jones.
Diversification Opportunities for UNITEDHEALTH and Dow Jones
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between UNITEDHEALTH and Dow is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding UNITEDHEALTH GROUP INC and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of UNITEDHEALTH i.e., UNITEDHEALTH and Dow Jones go up and down completely randomly.
Pair Corralation between UNITEDHEALTH and Dow Jones
Assuming the 90 days trading horizon UNITEDHEALTH GROUP INC is expected to generate 0.23 times more return on investment than Dow Jones. However, UNITEDHEALTH GROUP INC is 4.27 times less risky than Dow Jones. It trades about -0.24 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.34 per unit of risk. If you would invest 9,812 in UNITEDHEALTH GROUP INC on December 15, 2024 and sell it today you would lose (124.00) from holding UNITEDHEALTH GROUP INC or give up 1.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
UNITEDHEALTH GROUP INC vs. Dow Jones Industrial
Performance |
| Timeline |
UNITEDHEALTH and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
UNITEDHEALTH GROUP INC
Pair trading matchups for UNITEDHEALTH
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with UNITEDHEALTH and Dow Jones
The main advantage of trading using opposite UNITEDHEALTH and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNITEDHEALTH position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| UNITEDHEALTH vs. Sonida Senior Living | ||
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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