Correlation Between Unitedhealth and Agilent Technologies

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Unitedhealth and Agilent Technologies 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 Agilent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unitedhealth Group and Agilent Technologies, you can compare the effects of market volatilities on Unitedhealth and Agilent Technologies 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 Agilent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unitedhealth and Agilent Technologies.

Diversification Opportunities for Unitedhealth and Agilent Technologies

0.62
  Correlation Coefficient

Poor diversification

The 3 months correlation between Unitedhealth and Agilent is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Unitedhealth Group and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies 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 are associated (or correlated) with Agilent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agilent Technologies has no effect on the direction of Unitedhealth i.e., Unitedhealth and Agilent Technologies go up and down completely randomly.

Pair Corralation between Unitedhealth and Agilent Technologies

Considering the 90-day investment horizon Unitedhealth Group is expected to generate 0.87 times more return on investment than Agilent Technologies. However, Unitedhealth Group is 1.15 times less risky than Agilent Technologies. It trades about 0.08 of its potential returns per unit of risk. Agilent Technologies is currently generating about 0.05 per unit of risk. If you would invest  30,541  in Unitedhealth Group on May 13, 2022 and sell it today you would earn a total of  22,738  from holding Unitedhealth Group or generate 74.45% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Unitedhealth Group  vs.  Agilent Technologies

 Performance (%) 
       Timeline  
Unitedhealth Group 
Unitedhealth Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Unitedhealth Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly sluggish basic indicators, Unitedhealth may actually be approaching a critical reversion point that can send shares even higher in September 2022.

Unitedhealth Price Channel

Agilent Technologies 
Agilent Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Agilent Technologies are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat sluggish basic indicators, Agilent Technologies may actually be approaching a critical reversion point that can send shares even higher in September 2022.

Agilent Price Channel

Unitedhealth and Agilent Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Unitedhealth and Agilent Technologies

The main advantage of trading using opposite Unitedhealth and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unitedhealth position performs unexpectedly, Agilent Technologies 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 Agilent Technologies will offset losses from the drop in Agilent Technologies' long position.
The idea behind Unitedhealth Group and Agilent Technologies 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.

Other Complementary Tools

Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Go
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Go
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Go
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Go
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Go
Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Go