Correlation Between UnitedHealth Group and International Business
Can any of the company-specific risk be diversified away by investing in both UnitedHealth Group and International Business 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 Group and International Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UnitedHealth Group Incorporated and International Business Machines, you can compare the effects of market volatilities on UnitedHealth Group and International Business 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 Group with a short position of International Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and International Business.
Diversification Opportunities for UnitedHealth Group and International Business
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UnitedHealth and International is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group Incorporate and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business and UnitedHealth Group 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 Incorporated are associated (or correlated) with International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and International Business go up and down completely randomly.
Pair Corralation between UnitedHealth Group and International Business
Considering the 90-day investment horizon UnitedHealth Group Incorporated is expected to under-perform the International Business. In addition to that, UnitedHealth Group is 1.41 times more volatile than International Business Machines. It trades about -0.04 of its total potential returns per unit of risk. International Business Machines is currently generating about -0.01 per unit of volatility. If you would invest 18,344 in International Business Machines on January 20, 2024 and sell it today you would lose (197.00) from holding International Business Machines or give up 1.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
UnitedHealth Group Incorporate vs. International Business Machine
Performance |
| Timeline |
| UnitedHealth Group |
| International Business |
UnitedHealth Group and International Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UnitedHealth Group and International Business
The main advantage of trading using opposite UnitedHealth Group and International Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group position performs unexpectedly, International Business 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 International Business will offset losses from the drop in International Business' long position.| UnitedHealth Group vs. Certara | UnitedHealth Group vs. HealthStream | UnitedHealth Group vs. Evolent Health | UnitedHealth Group vs. Streamline Health Solutions |
| International Business vs. Information Services Group | International Business vs. Home Bancorp | International Business vs. CRA International | International Business vs. Aquagold International |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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