Correlation Between Unitedhealth and Select Medical

By analyzing existing cross correlation between Unitedhealth Group and Select Medical Holdings, you can compare the effects of market volatilities on Unitedhealth and Select Medical 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 Unitedhealth with a short position of Select Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unitedhealth and Select Medical.

Specify exactly 2 symbols:

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

Diversification Opportunities for Unitedhealth and Select Medical

-0.45
  Correlation Coefficient
Unitedhealth Group
Select Medical Holdings

Very good diversification

The 3 months correlation between Unitedhealth and Select is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Unitedhealth Group and Select Medical Holdings in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Select Medical Holdings and Unitedhealth 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 Unitedhealth Group are associated (or correlated) with Select Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Select Medical Holdings has no effect on the direction of Unitedhealth i.e., Unitedhealth and Select Medical go up and down completely randomly.

Pair Corralation between Unitedhealth and Select Medical

Considering the 90-day investment horizon Unitedhealth Group is expected to generate 0.51 times more return on investment than Select Medical. However, Unitedhealth Group is 1.95 times less risky than Select Medical. It trades about 0.11 of its potential returns per unit of risk. Select Medical Holdings is currently generating about -0.15 per unit of risk. If you would invest  41,100  in Unitedhealth Group on October 21, 2021 and sell it today you would earn a total of  5,152  from holding Unitedhealth Group or generate 12.54% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Unitedhealth Group  vs.  Select Medical Holdings

 Performance (%) 
      Timeline 
Unitedhealth Group 
Unitedhealth Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Unitedhealth Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Unitedhealth is not utilizing all of its potentials. The new stock price disturbance, may contribute to mid-run losses for the stockholders.

Unitedhealth Price Channel

Select Medical Holdings 
Select Performance
0 of 100
Over the last 90 days Select Medical Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's technical and fundamental indicators remain relatively steady which may send shares a bit higher in February 2022. The new chaos may also be a sign of medium-term up-swing for the company stakeholders.

Select Price Channel

Unitedhealth and Select Medical Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Unitedhealth and Select Medical

The main advantage of trading using opposite Unitedhealth and Select Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unitedhealth position performs unexpectedly, Select Medical 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 Select Medical will offset losses from the drop in Select Medical's long position.
The idea behind Unitedhealth Group and Select Medical Holdings 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

Other Complementary Tools

Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Go
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Go
Transaction History
View history of all your transactions and understand their impact on performance
Go
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Go
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Go
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Go