Correlation Between Caterpillar and UNITEDHEALTH
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By analyzing existing cross correlation between Caterpillar and UNITEDHEALTH GROUP INC, you can compare the effects of market volatilities on Caterpillar and UNITEDHEALTH 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 Caterpillar with a short position of UNITEDHEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and UNITEDHEALTH.
Diversification Opportunities for Caterpillar and UNITEDHEALTH
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Caterpillar and UNITEDHEALTH is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and UNITEDHEALTH GROUP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITEDHEALTH GROUP INC and Caterpillar 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 Caterpillar are associated (or correlated) with UNITEDHEALTH. 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 INC has no effect on the direction of Caterpillar i.e., Caterpillar and UNITEDHEALTH go up and down completely randomly.
Pair Corralation between Caterpillar and UNITEDHEALTH
Considering the 90-day investment horizon Caterpillar is expected to generate 0.81 times more return on investment than UNITEDHEALTH. However, Caterpillar is 1.23 times less risky than UNITEDHEALTH. It trades about 0.07 of its potential returns per unit of risk. UNITEDHEALTH GROUP INC is currently generating about -0.04 per unit of risk. If you would invest 35,385 in Caterpillar on September 18, 2024 and sell it today you would earn a total of 2,507 from holding Caterpillar or generate 7.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.41% |
Values | Daily Returns |
Caterpillar vs. UNITEDHEALTH GROUP INC
Performance |
Timeline |
Caterpillar |
UNITEDHEALTH GROUP INC |
Caterpillar and UNITEDHEALTH Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Caterpillar and UNITEDHEALTH
The main advantage of trading using opposite Caterpillar and UNITEDHEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, UNITEDHEALTH 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 will offset losses from the drop in UNITEDHEALTH's long position.Caterpillar vs. Aquagold International | Caterpillar vs. Thrivent High Yield | Caterpillar vs. Morningstar Unconstrained Allocation | Caterpillar vs. Via Renewables |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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