Correlation Between Zebra Technologies and UnitedHealth Group

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

By analyzing existing cross correlation between Zebra Technologies and UnitedHealth Group Incorporated, you can compare the effects of market volatilities on Zebra Technologies and UnitedHealth Group 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 Zebra Technologies with a short position of UnitedHealth Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zebra Technologies and UnitedHealth Group.

Diversification Opportunities for Zebra Technologies and UnitedHealth Group

0.81

Correlation Coefficient

Zebra Technologies  UnitedHealth Group

Very poor diversification

The 3 months correlation between Zebra and UnitedHealth is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Zebra Technologies and UnitedHealth Group Incorporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UnitedHealth Group and Zebra Technologies 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 Zebra Technologies are associated (or correlated) with UnitedHealth Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UnitedHealth Group has no effect on the direction of Zebra Technologies i.e., Zebra Technologies and UnitedHealth Group go up and down completely randomly.

Pair Corralation between Zebra Technologies and UnitedHealth Group

Assuming the 90 days trading horizon Zebra Technologies is expected to under-perform the UnitedHealth Group. In addition to that, Zebra Technologies is 1.65 times more volatile than UnitedHealth Group Incorporated. It trades about -0.19 of its total potential returns per unit of risk. UnitedHealth Group Incorporated is currently generating about -0.05 per unit of volatility. If you would invest  4,520  in UnitedHealth Group Incorporated on December 26, 2024 and sell it today you would lose (284.00) from holding UnitedHealth Group Incorporated or give up 6.28% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.36%
Values	Daily Returns

Zebra Technologies  vs.  UnitedHealth Group Incorporate

Zebra Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zebra Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

UnitedHealth Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days UnitedHealth Group Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical indicators, UnitedHealth Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Zebra Technologies and UnitedHealth Group

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

The idea behind Zebra Technologies and UnitedHealth Group Incorporated 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.