Correlation Between Universal Health and UnitedHealth Group
Can any of the company-specific risk be diversified away by investing in both Universal Health 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 Universal Health and UnitedHealth Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Health Services and UnitedHealth Group Incorporated, you can compare the effects of market volatilities on Universal Health 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 Universal Health with a short position of UnitedHealth Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Health and UnitedHealth Group.
Diversification Opportunities for Universal Health and UnitedHealth Group
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Universal and UnitedHealth is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Universal Health Services and UnitedHealth Group Incorporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UnitedHealth Group and Universal Health 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 Universal Health Services 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 Universal Health i.e., Universal Health and UnitedHealth Group go up and down completely randomly.
Pair Corralation between Universal Health and UnitedHealth Group
Considering the 90-day investment horizon Universal Health Services is expected to generate 1.47 times more return on investment than UnitedHealth Group. However, Universal Health is 1.47 times more volatile than UnitedHealth Group Incorporated. It trades about 0.03 of its potential returns per unit of risk. UnitedHealth Group Incorporated is currently generating about 0.0 per unit of risk. If you would invest 14,422 in Universal Health Services on December 29, 2023 and sell it today you would earn a total of 3,763 from holding Universal Health Services or generate 26.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Universal Health Services vs. UnitedHealth Group Incorporate
Performance |
Timeline |
Universal Health Services |
UnitedHealth Group |
Universal Health and UnitedHealth Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Universal Health and UnitedHealth Group
The main advantage of trading using opposite Universal Health and UnitedHealth Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Health 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.Universal Health vs. Microbot Medical | Universal Health vs. EUDA Health Holdings | Universal Health vs. Spectral AI | Universal Health vs. Definitive Healthcare Corp |
UnitedHealth Group vs. Microbot Medical | UnitedHealth Group vs. EUDA Health Holdings | UnitedHealth Group vs. Spectral AI | UnitedHealth Group vs. Definitive Healthcare Corp |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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