Correlation Between United States and UnitedHealth Group
Can any of the company-specific risk be diversified away by investing in both United States 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 United States and UnitedHealth Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Steel and UnitedHealth Group Incorporated, you can compare the effects of market volatilities on United States 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 United States with a short position of UnitedHealth Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and UnitedHealth Group.
Diversification Opportunities for United States and UnitedHealth Group
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between United and UnitedHealth is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and UnitedHealth Group Incorporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UnitedHealth Group and United States 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 United States Steel 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 United States i.e., United States and UnitedHealth Group go up and down completely randomly.
Pair Corralation between United States and UnitedHealth Group
Given the investment horizon of 90 days United States is expected to generate 2.28 times less return on investment than UnitedHealth Group. In addition to that, United States is 1.51 times more volatile than UnitedHealth Group Incorporated. It trades about 0.06 of its total potential returns per unit of risk. UnitedHealth Group Incorporated is currently generating about 0.21 per unit of volatility. If you would invest 1,130,100 in UnitedHealth Group Incorporated on August 30, 2024 and sell it today you would earn a total of 122,775 from holding UnitedHealth Group Incorporated or generate 10.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United States Steel vs. UnitedHealth Group Incorporate
Performance |
| Timeline |
| United States Steel |
| UnitedHealth Group |
United States and UnitedHealth Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and UnitedHealth Group
The main advantage of trading using opposite United States and UnitedHealth Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States 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.| United States vs. The Select Sector | United States vs. SPDR Series Trust | United States vs. FibroGen | United States vs. iShares Trust |
| UnitedHealth Group vs. MercadoLibre | UnitedHealth Group vs. Southwest Airlines | UnitedHealth Group vs. The Walt Disney | UnitedHealth Group vs. Apple Inc |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |