Correlation Between Rogers Sugar and UnitedHealth Group

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

By analyzing existing cross correlation between Rogers Sugar and UnitedHealth Group CDR, you can compare the effects of market volatilities on Rogers Sugar 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 Rogers Sugar with a short position of UnitedHealth Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rogers Sugar and UnitedHealth Group.

Diversification Opportunities for Rogers Sugar and UnitedHealth Group

0.2

Correlation Coefficient

Rogers Sugar  UnitedHealth Group

Modest diversification

The 3 months correlation between Rogers and UnitedHealth is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Rogers Sugar 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 Rogers Sugar 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 Rogers Sugar 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 Rogers Sugar i.e., Rogers Sugar and UnitedHealth Group go up and down completely randomly.

Pair Corralation between Rogers Sugar and UnitedHealth Group

Assuming the 90 days trading horizon Rogers Sugar is expected to generate 0.52 times more return on investment than UnitedHealth Group. However, Rogers Sugar is 1.94 times less risky than UnitedHealth Group. It trades about -0.17 of its potential returns per unit of risk. UnitedHealth Group CDR is currently generating about -0.18 per unit of risk. If you would invest  614.00  in Rogers Sugar on December 4, 2024 and sell it today you would lose (74.00) from holding Rogers Sugar or give up 12.05% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Rogers Sugar  vs.  UnitedHealth Group CDR

Rogers Sugar

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rogers Sugar has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's forward 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 CDR

Risk-Adjusted Performance

Very Weak

Over the last 90 days UnitedHealth Group CDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating 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.

Pair Trading with Rogers Sugar and UnitedHealth Group

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

The idea behind Rogers Sugar and UnitedHealth Group CDR 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.