Correlation Between KOOL2PLAY and UNITED RENTALS
Can any of the company-specific risk be diversified away by investing in both KOOL2PLAY 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 KOOL2PLAY and UNITED RENTALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KOOL2PLAY SA ZY and UNITED RENTALS, you can compare the effects of market volatilities on KOOL2PLAY 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 KOOL2PLAY with a short position of UNITED RENTALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of KOOL2PLAY and UNITED RENTALS.
Diversification Opportunities for KOOL2PLAY and UNITED RENTALS
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KOOL2PLAY and UNITED is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding KOOL2PLAY SA ZY and UNITED RENTALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITED RENTALS and KOOL2PLAY 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 KOOL2PLAY SA ZY 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 KOOL2PLAY i.e., KOOL2PLAY and UNITED RENTALS go up and down completely randomly.
Pair Corralation between KOOL2PLAY and UNITED RENTALS
Assuming the 90 days horizon KOOL2PLAY SA ZY is expected to under-perform the UNITED RENTALS. In addition to that, KOOL2PLAY is 3.36 times more volatile than UNITED RENTALS. It trades about -0.01 of its total potential returns per unit of risk. UNITED RENTALS is currently generating about 0.13 per unit of volatility. If you would invest 57,793 in UNITED RENTALS on September 2, 2024 and sell it today you would earn a total of 22,927 from holding UNITED RENTALS or generate 39.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KOOL2PLAY SA ZY vs. UNITED RENTALS
Performance |
| Timeline |
| KOOL2PLAY SA ZY |
| UNITED RENTALS |
KOOL2PLAY and UNITED RENTALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KOOL2PLAY and UNITED RENTALS
The main advantage of trading using opposite KOOL2PLAY and UNITED RENTALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KOOL2PLAY 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.| KOOL2PLAY vs. Nintendo Co | KOOL2PLAY vs. Sea Limited | KOOL2PLAY vs. Superior Plus Corp | KOOL2PLAY vs. NMI Holdings |
| UNITED RENTALS vs. Harmony Gold Mining | UNITED RENTALS vs. GREENX METALS LTD | UNITED RENTALS vs. INDOFOOD AGRI RES | UNITED RENTALS vs. Lion One Metals |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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