Correlation Between Deutsche Bank and UnitedHealth Group
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank 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 Deutsche Bank and UnitedHealth Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Bank Aktiengesellschaft and UnitedHealth Group Incorporated, you can compare the effects of market volatilities on Deutsche Bank 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 Deutsche Bank with a short position of UnitedHealth Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and UnitedHealth Group.
Diversification Opportunities for Deutsche Bank and UnitedHealth Group
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Deutsche and UnitedHealth is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank Aktiengesellscha and UnitedHealth Group Incorporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UnitedHealth Group and Deutsche Bank 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 Deutsche Bank Aktiengesellschaft 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 Deutsche Bank i.e., Deutsche Bank and UnitedHealth Group go up and down completely randomly.
Pair Corralation between Deutsche Bank and UnitedHealth Group
Assuming the 90 days trading horizon Deutsche Bank Aktiengesellschaft is expected to generate 1.32 times more return on investment than UnitedHealth Group. However, Deutsche Bank is 1.32 times more volatile than UnitedHealth Group Incorporated. It trades about 0.08 of its potential returns per unit of risk. UnitedHealth Group Incorporated is currently generating about 0.04 per unit of risk. If you would invest 6,102 in Deutsche Bank Aktiengesellschaft on October 26, 2024 and sell it today you would earn a total of 5,533 from holding Deutsche Bank Aktiengesellschaft or generate 90.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 88.73% |
| Values | Daily Returns |
Deutsche Bank Aktiengesellscha vs. UnitedHealth Group Incorporate
Performance |
| Timeline |
| Deutsche Bank Aktien |
| UnitedHealth Group |
Deutsche Bank and UnitedHealth Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Bank and UnitedHealth Group
The main advantage of trading using opposite Deutsche Bank and UnitedHealth Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank 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.| Deutsche Bank vs. Verizon Communications | Deutsche Bank vs. Burlington Stores, | Deutsche Bank vs. Martin Marietta Materials, | Deutsche Bank vs. Unity Software |
| UnitedHealth Group vs. T Mobile | UnitedHealth Group vs. Verizon Communications | UnitedHealth Group vs. Beyond Meat | UnitedHealth Group vs. Marvell Technology |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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