Correlation Between UnitedHealth Group and MAHLE Metal

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

By analyzing existing cross correlation between UnitedHealth Group Incorporated and MAHLE Metal Leve, you can compare the effects of market volatilities on UnitedHealth Group and MAHLE Metal 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 MAHLE Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and MAHLE Metal.

Diversification Opportunities for UnitedHealth Group and MAHLE Metal

-0.35

Correlation Coefficient

UnitedHealth Group  MAHLE Metal

Very good diversification

The 3 months correlation between UnitedHealth and MAHLE is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group Incorporate and MAHLE Metal Leve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAHLE Metal Leve 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 Incorporated are associated (or correlated) with MAHLE Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAHLE Metal Leve has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and MAHLE Metal go up and down completely randomly.

Pair Corralation between UnitedHealth Group and MAHLE Metal

Assuming the 90 days trading horizon UnitedHealth Group Incorporated is expected to generate 1.72 times more return on investment than MAHLE Metal. However, UnitedHealth Group is 1.72 times more volatile than MAHLE Metal Leve. It trades about 0.02 of its potential returns per unit of risk. MAHLE Metal Leve is currently generating about -0.08 per unit of risk. If you would invest  4,426  in UnitedHealth Group Incorporated on September 26, 2024 and sell it today you would earn a total of  78.00  from holding UnitedHealth Group Incorporated or generate 1.76% return on investment over 90 days.

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

UnitedHealth Group Incorporate  vs.  MAHLE Metal Leve

UnitedHealth Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in UnitedHealth Group Incorporated are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical indicators, UnitedHealth Group is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

MAHLE Metal Leve

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MAHLE Metal Leve has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with UnitedHealth Group and MAHLE Metal

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

The idea behind UnitedHealth Group Incorporated and MAHLE Metal Leve 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.