Correlation Between UnitedHealth Group and Banco Bilbao
Can any of the company-specific risk be diversified away by investing in both UnitedHealth Group and Banco Bilbao 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 Banco Bilbao 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 Banco Bilbao Vizcaya, you can compare the effects of market volatilities on UnitedHealth Group and Banco Bilbao 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 Banco Bilbao. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and Banco Bilbao.
Diversification Opportunities for UnitedHealth Group and Banco Bilbao
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UnitedHealth and Banco is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group Incorporate and Banco Bilbao Vizcaya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Bilbao Vizcaya 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 Banco Bilbao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Bilbao Vizcaya has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and Banco Bilbao go up and down completely randomly.
Pair Corralation between UnitedHealth Group and Banco Bilbao
Assuming the 90 days trading horizon UnitedHealth Group Incorporated is expected to generate 1.08 times more return on investment than Banco Bilbao. However, UnitedHealth Group is 1.08 times more volatile than Banco Bilbao Vizcaya. It trades about 0.17 of its potential returns per unit of risk. Banco Bilbao Vizcaya is currently generating about -0.08 per unit of risk. If you would invest 1,148,300 in UnitedHealth Group Incorporated on September 2, 2024 and sell it today you would earn a total of 95,390 from holding UnitedHealth Group Incorporated or generate 8.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UnitedHealth Group Incorporate vs. Banco Bilbao Vizcaya
Performance |
| Timeline |
| UnitedHealth Group |
| Banco Bilbao Vizcaya |
UnitedHealth Group and Banco Bilbao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UnitedHealth Group and Banco Bilbao
The main advantage of trading using opposite UnitedHealth Group and Banco Bilbao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group position performs unexpectedly, Banco Bilbao 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 Banco Bilbao will offset losses from the drop in Banco Bilbao's long position.| UnitedHealth Group vs. The Select Sector | UnitedHealth Group vs. Promotora y Operadora | UnitedHealth Group vs. SPDR Series Trust | UnitedHealth Group vs. iShares Trust |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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