Correlation Between Information Services and UnitedHealth Group

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

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

Diversification Opportunities for Information Services and UnitedHealth Group

-0.73

Correlation Coefficient

Information Services  UnitedHealth Group

Pay attention - limited upside

The 3 months correlation between Information and UnitedHealth is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Information Services and UnitedHealth Group CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UnitedHealth Group CDR and Information Services 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 Information Services 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 CDR has no effect on the direction of Information Services i.e., Information Services and UnitedHealth Group go up and down completely randomly.

Pair Corralation between Information Services and UnitedHealth Group

Assuming the 90 days trading horizon Information Services is expected to generate 0.43 times more return on investment than UnitedHealth Group. However, Information Services is 2.32 times less risky than UnitedHealth Group. It trades about 0.23 of its potential returns per unit of risk. UnitedHealth Group CDR is currently generating about -0.18 per unit of risk. If you would invest  2,667  in Information Services on April 20, 2025 and sell it today you would earn a total of  583.00  from holding Information Services or generate 21.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Information Services  vs.  UnitedHealth Group CDR

Information Services

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Information Services are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal fundamental indicators, Information Services displayed solid returns over the last few months and may actually be approaching a breakup point.

UnitedHealth Group CDR

Risk-Adjusted Performance

Very Weak

Over the last 90 days UnitedHealth Group CDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in August 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Information Services and UnitedHealth Group

The main advantage of trading using opposite Information Services and UnitedHealth Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Information Services 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 Information Services and UnitedHealth Group CDR 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.