Correlation Between UNITEDHEALTH and Juniata Valley

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

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

Diversification Opportunities for UNITEDHEALTH and Juniata Valley

-0.5

Correlation Coefficient

UNITEDHEALTH  Juniata Valley

Very good diversification

The 3 months correlation between UNITEDHEALTH and Juniata is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding UNITEDHEALTH GROUP INC and Juniata Valley Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniata Valley Financial and UNITEDHEALTH 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 INC are associated (or correlated) with Juniata Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juniata Valley Financial has no effect on the direction of UNITEDHEALTH i.e., UNITEDHEALTH and Juniata Valley go up and down completely randomly.

Pair Corralation between UNITEDHEALTH and Juniata Valley

Assuming the 90 days trading horizon UNITEDHEALTH is expected to generate 36.32 times less return on investment than Juniata Valley. But when comparing it to its historical volatility, UNITEDHEALTH GROUP INC is 4.8 times less risky than Juniata Valley. It trades about 0.0 of its potential returns per unit of risk. Juniata Valley Financial is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,417  in Juniata Valley Financial on October 10, 2024 and sell it today you would lose (164.00) from holding Juniata Valley Financial or give up 11.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	90.15%
Values	Daily Returns

UNITEDHEALTH GROUP INC  vs.  Juniata Valley Financial

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.

Juniata Valley Financial

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Juniata Valley Financial are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Juniata Valley may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with UNITEDHEALTH and Juniata Valley

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

The idea behind UNITEDHEALTH GROUP INC and Juniata Valley Financial 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.

Check out your portfolio center.

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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.