Correlation Between UnitedHealth Group and HLS Therapeutics

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

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

Diversification Opportunities for UnitedHealth Group and HLS Therapeutics

0.0

Correlation Coefficient

UnitedHealth Group  HLS Therapeutics

Pay attention - limited upside

The 3 months correlation between UnitedHealth and HLS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group CDR and HLS Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HLS Therapeutics and UnitedHealth Group 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 UnitedHealth Group CDR are associated (or correlated) with HLS Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HLS Therapeutics has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and HLS Therapeutics go up and down completely randomly.

Pair Corralation between UnitedHealth Group and HLS Therapeutics

Assuming the 90 days trading horizon UnitedHealth Group is expected to generate 5.9 times less return on investment than HLS Therapeutics. In addition to that, UnitedHealth Group is 1.04 times more volatile than HLS Therapeutics. It trades about 0.03 of its total potential returns per unit of risk. HLS Therapeutics is currently generating about 0.19 per unit of volatility. If you would invest  387.00  in HLS Therapeutics on December 24, 2024 and sell it today you would earn a total of  83.00  from holding HLS Therapeutics or generate 21.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

UnitedHealth Group CDR  vs.  HLS Therapeutics

UnitedHealth Group CDR

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in UnitedHealth Group CDR are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, UnitedHealth Group is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

HLS Therapeutics

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in HLS Therapeutics are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, HLS Therapeutics displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with UnitedHealth Group and HLS Therapeutics

The main advantage of trading using opposite UnitedHealth Group and HLS Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group position performs unexpectedly, HLS Therapeutics 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 HLS Therapeutics will offset losses from the drop in HLS Therapeutics' long position.

The idea behind UnitedHealth Group CDR and HLS Therapeutics 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..