Correlation Between Canaf Investments and UnitedHealth Group
Can any of the company-specific risk be diversified away by investing in both Canaf Investments 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 Canaf Investments and UnitedHealth Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canaf Investments and UnitedHealth Group CDR, you can compare the effects of market volatilities on Canaf Investments 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 Canaf Investments with a short position of UnitedHealth Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canaf Investments and UnitedHealth Group.
Diversification Opportunities for Canaf Investments and UnitedHealth Group
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Canaf and UnitedHealth is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Canaf Investments and UnitedHealth Group CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UnitedHealth Group CDR and Canaf Investments 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 Canaf Investments 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 CDR has no effect on the direction of Canaf Investments i.e., Canaf Investments and UnitedHealth Group go up and down completely randomly.
Pair Corralation between Canaf Investments and UnitedHealth Group
Assuming the 90 days horizon Canaf Investments is expected to generate 2.18 times more return on investment than UnitedHealth Group. However, Canaf Investments is 2.18 times more volatile than UnitedHealth Group CDR. It trades about 0.08 of its potential returns per unit of risk. UnitedHealth Group CDR is currently generating about 0.01 per unit of risk. If you would invest 10.00 in Canaf Investments on October 4, 2024 and sell it today you would earn a total of 21.00 from holding Canaf Investments or generate 210.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Canaf Investments vs. UnitedHealth Group CDR
Performance |
Timeline |
Canaf Investments |
UnitedHealth Group CDR |
Canaf Investments and UnitedHealth Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Canaf Investments and UnitedHealth Group
The main advantage of trading using opposite Canaf Investments and UnitedHealth Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canaf Investments 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.Canaf Investments vs. First Majestic Silver | Canaf Investments vs. Ivanhoe Energy | Canaf Investments vs. Flinders Resources Limited | Canaf Investments vs. Orezone Gold 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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