Correlation Between UnitedHealth Group and Summa Silver
Can any of the company-specific risk be diversified away by investing in both UnitedHealth Group and Summa Silver 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 Group and Summa Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UnitedHealth Group CDR and Summa Silver Corp, you can compare the effects of market volatilities on UnitedHealth Group and Summa Silver 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 Group with a short position of Summa Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and Summa Silver.
Diversification Opportunities for UnitedHealth Group and Summa Silver
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between UnitedHealth and Summa is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group CDR and Summa Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summa Silver Corp and UnitedHealth Group 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 CDR are associated (or correlated) with Summa Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summa Silver Corp has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and Summa Silver go up and down completely randomly.
Pair Corralation between UnitedHealth Group and Summa Silver
Assuming the 90 days trading horizon UnitedHealth Group CDR is expected to generate 0.52 times more return on investment than Summa Silver. However, UnitedHealth Group CDR is 1.94 times less risky than Summa Silver. It trades about -0.09 of its potential returns per unit of risk. Summa Silver Corp is currently generating about -0.14 per unit of risk. If you would invest 2,739 in UnitedHealth Group CDR on September 24, 2024 and sell it today you would lose (357.00) from holding UnitedHealth Group CDR or give up 13.03% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 98.46% |
Values | Daily Returns |
UnitedHealth Group CDR vs. Summa Silver Corp
Performance |
Timeline |
UnitedHealth Group CDR |
Summa Silver Corp |
UnitedHealth Group and Summa Silver Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with UnitedHealth Group and Summa Silver
The main advantage of trading using opposite UnitedHealth Group and Summa Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group position performs unexpectedly, Summa Silver 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 Summa Silver will offset losses from the drop in Summa Silver's long position.UnitedHealth Group vs. Maple Leaf Foods | UnitedHealth Group vs. Doman Building Materials | UnitedHealth Group vs. MAG Silver Corp | UnitedHealth Group vs. Millennium Silver Corp |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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