Correlation Between IShares Canadian and UnitedHealth Group
Can any of the company-specific risk be diversified away by investing in both IShares Canadian 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 IShares Canadian and UnitedHealth Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Canadian HYBrid and UnitedHealth Group CDR, you can compare the effects of market volatilities on IShares Canadian 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 IShares Canadian with a short position of UnitedHealth Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and UnitedHealth Group.
Diversification Opportunities for IShares Canadian and UnitedHealth Group
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between IShares and UnitedHealth is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian HYBrid and UnitedHealth Group CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UnitedHealth Group CDR and IShares Canadian 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 iShares Canadian HYBrid 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 CDR has no effect on the direction of IShares Canadian i.e., IShares Canadian and UnitedHealth Group go up and down completely randomly.
Pair Corralation between IShares Canadian and UnitedHealth Group
Assuming the 90 days trading horizon IShares Canadian is expected to generate 1.08 times less return on investment than UnitedHealth Group. But when comparing it to its historical volatility, iShares Canadian HYBrid is 3.71 times less risky than UnitedHealth Group. It trades about 0.08 of its potential returns per unit of risk. UnitedHealth Group CDR is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,591 in UnitedHealth Group CDR on August 31, 2024 and sell it today you would earn a total of 297.00 from holding UnitedHealth Group CDR or generate 11.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Canadian HYBrid vs. UnitedHealth Group CDR
Performance |
| Timeline |
| iShares Canadian HYBrid |
| UnitedHealth Group CDR |
IShares Canadian and UnitedHealth Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and UnitedHealth Group
The main advantage of trading using opposite IShares Canadian and UnitedHealth Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian 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.| IShares Canadian vs. iShares IG Corporate | IShares Canadian vs. iShares High Yield | IShares Canadian vs. iShares Floating Rate | IShares Canadian vs. iShares JP Morgan |
| UnitedHealth Group vs. iShares Canadian HYBrid | UnitedHealth Group vs. Brompton European Dividend | UnitedHealth Group vs. Solar Alliance Energy | UnitedHealth Group vs. PHN Multi Style All Cap |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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