Correlation Between Intel and UNITEDHEALTH

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

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

Diversification Opportunities for Intel and UNITEDHEALTH

-0.42

Correlation Coefficient

Intel  UNITEDHEALTH

Very good diversification

The 3 months correlation between Intel and UNITEDHEALTH is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Intel 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 Intel 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 Intel 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 Intel i.e., Intel and UNITEDHEALTH go up and down completely randomly.

Pair Corralation between Intel and UNITEDHEALTH

Given the investment horizon of 90 days Intel is expected to generate 1.18 times more return on investment than UNITEDHEALTH. However, Intel is 1.18 times more volatile than UNITEDHEALTH GROUP INC. It trades about 0.02 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  2,077  in Intel on September 18, 2024 and sell it today you would earn a total of  6.00  from holding Intel or generate 0.29% return on investment over 90 days.

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

Intel  vs.  UNITEDHEALTH GROUP INC

Intel

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Intel is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

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 latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Intel and UNITEDHEALTH

The main advantage of trading using opposite Intel and UNITEDHEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel 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 Intel 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.