Correlation Between UNITEDHEALTH and Encore Capital
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By analyzing existing cross correlation between UNITEDHEALTH GROUP INC and Encore Capital Group, you can compare the effects of market volatilities on UNITEDHEALTH and Encore Capital 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 Encore Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNITEDHEALTH and Encore Capital.
Diversification Opportunities for UNITEDHEALTH and Encore Capital
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between UNITEDHEALTH and Encore is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding UNITEDHEALTH GROUP INC and Encore Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Encore Capital Group 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 Encore Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Encore Capital Group has no effect on the direction of UNITEDHEALTH i.e., UNITEDHEALTH and Encore Capital go up and down completely randomly.
Pair Corralation between UNITEDHEALTH and Encore Capital
Assuming the 90 days trading horizon UNITEDHEALTH GROUP INC is expected to generate 0.31 times more return on investment than Encore Capital. However, UNITEDHEALTH GROUP INC is 3.27 times less risky than Encore Capital. It trades about -0.19 of its potential returns per unit of risk. Encore Capital Group is currently generating about -0.17 per unit of risk. If you would invest 9,833 in UNITEDHEALTH GROUP INC on September 23, 2024 and sell it today you would lose (153.00) from holding UNITEDHEALTH GROUP INC or give up 1.56% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
UNITEDHEALTH GROUP INC vs. Encore Capital Group
Performance |
Timeline |
UNITEDHEALTH GROUP INC |
Encore Capital Group |
UNITEDHEALTH and Encore Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with UNITEDHEALTH and Encore Capital
The main advantage of trading using opposite UNITEDHEALTH and Encore Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNITEDHEALTH position performs unexpectedly, Encore Capital 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 Encore Capital will offset losses from the drop in Encore Capital's long position.UNITEDHEALTH vs. Encore Capital Group | UNITEDHEALTH vs. Chiba Bank Ltd | UNITEDHEALTH vs. Western Union Co | UNITEDHEALTH vs. Papaya Growth Opportunity |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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