UnitedHealth

On an ordinary day over the last month of trading, UNH has moved about 1.72%, making it about as volatile as most of the stocks Kinzan tracks (their median is 1.81%).

Measured against its own habit, today is a −0.9σ day: the kind of session it has most weeks.

It sits near the bottom of its 24-hour range of 417.42–439.98, measured on hourly closes.

Most of the move came in the New York session (13:00–22:00 UTC), which accounted for about 69% of the day's price action.

Over the last 60 sessions of daily returns, it has moved most closely with SMI (+0.43, a moderate relationship).

Its last close is at the 70th percentile of its own last 82 sessions, and its 20-day volatility at the 97th, near the top of its range for the period.

Market read: UnitedHealth is cratering on massive volume, sitting at the absolute bottom of its 24-hour range.

What it is

UnitedHealth is two companies that trade with each other. UnitedHealthcare is the insurer: it sells health cover to employers and individuals, runs Medicare Advantage plans for older Americans, funded by the federal government, and manages Medicaid programmes for states. Optum is the services side. Its health arm employs or contracts with large numbers of physicians and runs clinics and surgery centres; its pharmacy benefit manager negotiates drug prices for health plans and employers; and its insight business sells data, software and claims processing to hospitals and insurers. Money flows between the two as members see Optum clinicians and fill prescriptions through Optum. That vertical integration is both the strategic case for the group and the focus of regulatory scrutiny.

What drives it

The medical care ratio, the share of premium revenue paid out in claims, is the number that decides each quarter. Margins are thin relative to revenue, so a percentage point in that ratio changes profits substantially, and because claims arrive with a lag, a rise in patients’ use of care tends to surface at results rather than in advance. Government is the other dominant force. Medicare Advantage payment rates are set annually, with an advance notice early in the year and final rates in early April, and changes to risk-adjustment rules or audit practice can reshape the economics of the whole business. Medicaid funding decisions by states and Congress, proposals to reform pharmacy benefit managers, and legal scrutiny of billing practices all reach the shares directly. The industry is also a political target.

How it trades through the day

It is usually the first large managed-care company to report each quarter, before the US open, so its medical-cost commentary sets the tone for the group. Medicare rate announcements often land after the close, and the reaction then shows in after-hours trading. The regular session runs 13:30 to 20:00 UTC in summer and 14:30 to 21:00 UTC in winter. It is a Dow Jones Industrial Average constituent.

What it tends to move with

It moves with the other managed-care companies, Elevance Health, Cigna, CVS Health, Humana, Centene and Molina. Hospital operators such as HCA often move the other way on news about patient volumes, because higher utilisation is revenue for a hospital and cost for an insurer.