Correlation Between Health Rev and UnitedHealth Group

Can any of the company-specific risk be diversified away by investing in both Health Rev 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 Health Rev and UnitedHealth Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Health Rev Assurn and UnitedHealth Group Incorporated, you can compare the effects of market volatilities on Health Rev 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 Health Rev with a short position of UnitedHealth Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Health Rev and UnitedHealth Group.

Diversification Opportunities for Health Rev and UnitedHealth Group

0.0

Correlation Coefficient

Health Rev  UnitedHealth Group

Pay attention - limited upside

The 3 months correlation between Health and UnitedHealth is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Health Rev Assurn and UnitedHealth Group Incorporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UnitedHealth Group and Health Rev 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 Health Rev Assurn 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 Health Rev i.e., Health Rev and UnitedHealth Group go up and down completely randomly.

Pair Corralation between Health Rev and UnitedHealth Group

If you would invest (100.00) in Health Rev Assurn on January 17, 2024 and sell it today you would earn a total of  100.00  from holding Health Rev Assurn or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Health Rev Assurn  vs.  UnitedHealth Group Incorporate

Health Rev Assurn

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Health Rev Assurn has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Health Rev is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

UnitedHealth Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UnitedHealth Group Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in May 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Health Rev and UnitedHealth Group

The main advantage of trading using opposite Health Rev and UnitedHealth Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Health Rev 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.

The idea behind Health Rev Assurn and UnitedHealth Group Incorporated pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.