Correlation Between UNITEDHEALTH and PVH Corp

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

Diversification Opportunities for UNITEDHEALTH and PVH Corp

-0.4

Correlation Coefficient

UNITEDHEALTH  PVH Corp

Very good diversification

The 3 months correlation between UNITEDHEALTH and PVH is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding UNITEDHEALTH GROUP INC and PVH Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PVH Corp 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 PVH Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PVH Corp has no effect on the direction of UNITEDHEALTH i.e., UNITEDHEALTH and PVH Corp go up and down completely randomly.

Pair Corralation between UNITEDHEALTH and PVH Corp

Assuming the 90 days trading horizon UNITEDHEALTH GROUP INC is expected to generate 28.82 times more return on investment than PVH Corp. However, UNITEDHEALTH is 28.82 times more volatile than PVH Corp. It trades about 0.06 of its potential returns per unit of risk. PVH Corp is currently generating about 0.02 per unit of risk. If you would invest  7,407  in UNITEDHEALTH GROUP INC on October 23, 2024 and sell it today you would earn a total of  555.00  from holding UNITEDHEALTH GROUP INC or generate 7.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	78.38%
Values	Daily Returns

UNITEDHEALTH GROUP INC  vs.  PVH Corp

UNITEDHEALTH GROUP INC

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in UNITEDHEALTH GROUP INC are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, UNITEDHEALTH sustained solid returns over the last few months and may actually be approaching a breakup point.

PVH Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PVH Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, PVH Corp is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with UNITEDHEALTH and PVH Corp

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

The idea behind UNITEDHEALTH GROUP INC and PVH Corp 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 CEOs Directory module to screen CEOs from public companies around the world.