Correlation Between Impinj and UNITED RENTALS
Can any of the company-specific risk be diversified away by investing in both Impinj 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 Impinj and UNITED RENTALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Impinj Inc and UNITED RENTALS, you can compare the effects of market volatilities on Impinj 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 Impinj with a short position of UNITED RENTALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impinj and UNITED RENTALS.
Diversification Opportunities for Impinj and UNITED RENTALS
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Impinj and UNITED is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Impinj Inc and UNITED RENTALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITED RENTALS and Impinj 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 Impinj Inc 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 Impinj i.e., Impinj and UNITED RENTALS go up and down completely randomly.
Pair Corralation between Impinj and UNITED RENTALS
Assuming the 90 days horizon Impinj is expected to generate 1.24 times less return on investment than UNITED RENTALS. In addition to that, Impinj is 1.7 times more volatile than UNITED RENTALS. It trades about 0.04 of its total potential returns per unit of risk. UNITED RENTALS is currently generating about 0.09 per unit of volatility. If you would invest 32,631 in UNITED RENTALS on August 25, 2024 and sell it today you would earn a total of 47,229 from holding UNITED RENTALS or generate 144.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Impinj Inc vs. UNITED RENTALS
Performance |
| Timeline |
| Impinj Inc |
| UNITED RENTALS |
Impinj and UNITED RENTALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impinj and UNITED RENTALS
The main advantage of trading using opposite Impinj and UNITED RENTALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impinj 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's long position.| Impinj vs. Hyrican Informationssysteme Aktiengesellschaft | Impinj vs. Fidelity National Information | Impinj vs. PUBLIC STORAGE PRFO | Impinj vs. Information Services International Dentsu |
| UNITED RENTALS vs. CONAGRA FOODS | UNITED RENTALS vs. ON SEMICONDUCTOR | UNITED RENTALS vs. JJ SNACK FOODS | UNITED RENTALS vs. PT Indofood Sukses |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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