Correlation Between UnitedHealth Group and Zonte Metals

Can any of the company-specific risk be diversified away by investing in both UnitedHealth Group and Zonte Metals 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 Zonte Metals 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 Zonte Metals, you can compare the effects of market volatilities on UnitedHealth Group and Zonte Metals 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 Zonte Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and Zonte Metals.

Diversification Opportunities for UnitedHealth Group and Zonte Metals

-0.61

Correlation Coefficient

UnitedHealth Group  Zonte Metals

Excellent diversification

The 3 months correlation between UnitedHealth and Zonte is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group CDR and Zonte Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zonte Metals 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 Zonte Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zonte Metals has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and Zonte Metals go up and down completely randomly.

Pair Corralation between UnitedHealth Group and Zonte Metals

Assuming the 90 days trading horizon UnitedHealth Group CDR is expected to generate 0.27 times more return on investment than Zonte Metals. However, UnitedHealth Group CDR is 3.73 times less risky than Zonte Metals. It trades about 0.02 of its potential returns per unit of risk. Zonte Metals is currently generating about -0.19 per unit of risk. If you would invest  2,415  in UnitedHealth Group CDR on October 22, 2024 and sell it today you would earn a total of  10.00  from holding UnitedHealth Group CDR or generate 0.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	94.44%
Values	Daily Returns

UnitedHealth Group CDR  vs.  Zonte Metals

UnitedHealth Group CDR

Risk-Adjusted Performance

0 of 100

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 latest abnormal performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Zonte Metals

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Zonte Metals are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Zonte Metals showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with UnitedHealth Group and Zonte Metals

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

The idea behind UnitedHealth Group CDR and Zonte Metals 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.