Correlation Between ClearOne and UNITEDHEALTH

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

By analyzing existing cross correlation between ClearOne and UNITEDHEALTH GROUP INC, you can compare the effects of market volatilities on ClearOne 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 ClearOne with a short position of UNITEDHEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of ClearOne and UNITEDHEALTH.

Diversification Opportunities for ClearOne and UNITEDHEALTH

-0.05

Correlation Coefficient

ClearOne  UNITEDHEALTH

Good diversification

The 3 months correlation between ClearOne and UNITEDHEALTH is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding ClearOne 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 ClearOne 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 ClearOne 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 ClearOne i.e., ClearOne and UNITEDHEALTH go up and down completely randomly.

Pair Corralation between ClearOne and UNITEDHEALTH

Given the investment horizon of 90 days ClearOne is expected to under-perform the UNITEDHEALTH. In addition to that, ClearOne is 13.22 times more volatile than UNITEDHEALTH GROUP INC. It trades about -0.01 of its total potential returns per unit of risk. UNITEDHEALTH GROUP INC is currently generating about 0.01 per unit of volatility. If you would invest  9,407  in UNITEDHEALTH GROUP INC on September 30, 2024 and sell it today you would earn a total of  20.00  from holding UNITEDHEALTH GROUP INC or generate 0.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

ClearOne  vs.  UNITEDHEALTH GROUP INC

ClearOne

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ClearOne has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, ClearOne is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

UNITEDHEALTH GROUP INC

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with ClearOne and UNITEDHEALTH

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

The idea behind ClearOne and UNITEDHEALTH GROUP INC 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 the Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.