Correlation Between AXA SA and UnitedHealth Group

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

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

Diversification Opportunities for AXA SA and UnitedHealth Group

0.0

Correlation Coefficient

AXA SA  UnitedHealth Group

Pay attention - limited upside

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

Pair Corralation between AXA SA and UnitedHealth Group

If you would invest  1,045,552  in UnitedHealth Group Incorporated on December 31, 2024 and sell it today you would earn a total of  11,447  from holding UnitedHealth Group Incorporated or generate 1.09% return on investment over 90 days.

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

AXA SA  vs.  UnitedHealth Group Incorporate

AXA SA

Risk-Adjusted Performance

OK

Over the last 90 days AXA SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, AXA SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

UnitedHealth Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in UnitedHealth Group Incorporated are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical indicators, UnitedHealth Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with AXA SA and UnitedHealth Group

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

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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 Global Correlations module to find global opportunities by holding instruments from different markets.