Correlation Between CM Hospitalar and UnitedHealth Group
Can any of the company-specific risk be diversified away by investing in both CM Hospitalar and UnitedHealth Group 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 CM Hospitalar and UnitedHealth Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CM Hospitalar SA and UnitedHealth Group Incorporated, you can compare the effects of market volatilities on CM Hospitalar and UnitedHealth Group 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 CM Hospitalar with a short position of UnitedHealth Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of CM Hospitalar and UnitedHealth Group.
Diversification Opportunities for CM Hospitalar and UnitedHealth Group
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between VVEO3 and UnitedHealth is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding CM Hospitalar SA and UnitedHealth Group Incorporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UnitedHealth Group and CM Hospitalar 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 CM Hospitalar SA are associated (or correlated) with UnitedHealth Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UnitedHealth Group has no effect on the direction of CM Hospitalar i.e., CM Hospitalar and UnitedHealth Group go up and down completely randomly.
Pair Corralation between CM Hospitalar and UnitedHealth Group
Assuming the 90 days trading horizon CM Hospitalar SA is expected to under-perform the UnitedHealth Group. In addition to that, CM Hospitalar is 2.17 times more volatile than UnitedHealth Group Incorporated. It trades about -0.09 of its total potential returns per unit of risk. UnitedHealth Group Incorporated is currently generating about 0.03 per unit of volatility. If you would invest 3,936 in UnitedHealth Group Incorporated on August 26, 2024 and sell it today you would earn a total of 976.00 from holding UnitedHealth Group Incorporated or generate 24.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CM Hospitalar SA vs. UnitedHealth Group Incorporate
Performance |
| Timeline |
| CM Hospitalar SA |
| UnitedHealth Group |
CM Hospitalar and UnitedHealth Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CM Hospitalar and UnitedHealth Group
The main advantage of trading using opposite CM Hospitalar and UnitedHealth Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CM Hospitalar position performs unexpectedly, UnitedHealth Group 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 UnitedHealth Group will offset losses from the drop in UnitedHealth Group's long position.| CM Hospitalar vs. Ameriprise Financial | CM Hospitalar vs. GP Investments | CM Hospitalar vs. UnitedHealth Group Incorporated | CM Hospitalar vs. Planet Fitness |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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