Correlation Between BRP and UNITEDHEALTH

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

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

Diversification Opportunities for BRP and UNITEDHEALTH

-0.3

Correlation Coefficient

BRP  UNITEDHEALTH

Very good diversification

The 3 months correlation between BRP and UNITEDHEALTH is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding BRP Inc 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 BRP 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 BRP Inc 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 BRP i.e., BRP and UNITEDHEALTH go up and down completely randomly.

Pair Corralation between BRP and UNITEDHEALTH

Given the investment horizon of 90 days BRP Inc is expected to under-perform the UNITEDHEALTH. In addition to that, BRP is 1.86 times more volatile than UNITEDHEALTH GROUP INC. It trades about -0.2 of its total potential returns per unit of risk. UNITEDHEALTH GROUP INC is currently generating about 0.16 per unit of volatility. If you would invest  8,001  in UNITEDHEALTH GROUP INC on December 24, 2024 and sell it today you would earn a total of  803.00  from holding UNITEDHEALTH GROUP INC or generate 10.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	77.05%
Values	Daily Returns

BRP Inc  vs.  UNITEDHEALTH GROUP INC

BRP Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days BRP Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

UNITEDHEALTH GROUP INC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in UNITEDHEALTH GROUP INC are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, UNITEDHEALTH sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BRP and UNITEDHEALTH

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

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.