Correlation Between CN MODERN and United Rentals
Can any of the company-specific risk be diversified away by investing in both CN MODERN and United Rentals 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 CN MODERN and United Rentals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CN MODERN DAIRY and United Rentals, you can compare the effects of market volatilities on CN MODERN and United Rentals 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 CN MODERN with a short position of United Rentals. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN MODERN and United Rentals.
Diversification Opportunities for CN MODERN and United Rentals
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 07M and United is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding CN MODERN DAIRY and United Rentals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Rentals and CN MODERN 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 CN MODERN DAIRY are associated (or correlated) with United Rentals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Rentals has no effect on the direction of CN MODERN i.e., CN MODERN and United Rentals go up and down completely randomly.
Pair Corralation between CN MODERN and United Rentals
Assuming the 90 days trading horizon CN MODERN DAIRY is expected to generate 2.03 times more return on investment than United Rentals. However, CN MODERN is 2.03 times more volatile than United Rentals. It trades about 0.02 of its potential returns per unit of risk. United Rentals is currently generating about -0.12 per unit of risk. If you would invest 9.70 in CN MODERN DAIRY on October 20, 2024 and sell it today you would lose (0.05) from holding CN MODERN DAIRY or give up 0.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CN MODERN DAIRY vs. United Rentals
Performance |
| Timeline |
| CN MODERN DAIRY |
| United Rentals |
CN MODERN and United Rentals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CN MODERN and United Rentals
The main advantage of trading using opposite CN MODERN and United Rentals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN MODERN position performs unexpectedly, United Rentals 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 United Rentals will offset losses from the drop in United Rentals' long position.| CN MODERN vs. Addtech AB | CN MODERN vs. SOFI TECHNOLOGIES | CN MODERN vs. NetSol Technologies | CN MODERN vs. THORNEY TECHS LTD |
| United Rentals vs. Australian Agricultural | United Rentals vs. Sumitomo Mitsui Construction | United Rentals vs. Dairy Farm International | United Rentals vs. Federal Agricultural Mortgage |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |