Correlation Between Alstria Office and UNITED RENTALS
Can any of the company-specific risk be diversified away by investing in both Alstria Office 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 Alstria Office and UNITED RENTALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between alstria office REIT AG and UNITED RENTALS, you can compare the effects of market volatilities on Alstria Office 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 Alstria Office with a short position of UNITED RENTALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alstria Office and UNITED RENTALS.
Diversification Opportunities for Alstria Office and UNITED RENTALS
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Alstria and UNITED is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding alstria office REIT AG and UNITED RENTALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITED RENTALS and Alstria Office 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 alstria office REIT AG 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 Alstria Office i.e., Alstria Office and UNITED RENTALS go up and down completely randomly.
Pair Corralation between Alstria Office and UNITED RENTALS
Assuming the 90 days horizon Alstria Office is expected to generate 3.34 times less return on investment than UNITED RENTALS. In addition to that, Alstria Office is 1.35 times more volatile than UNITED RENTALS. It trades about 0.02 of its total potential returns per unit of risk. UNITED RENTALS is currently generating about 0.07 per unit of volatility. If you would invest 36,453 in UNITED RENTALS on October 17, 2024 and sell it today you would earn a total of 34,067 from holding UNITED RENTALS or generate 93.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
alstria office REIT AG vs. UNITED RENTALS
Performance |
| Timeline |
| alstria office REIT |
| UNITED RENTALS |
Alstria Office and UNITED RENTALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alstria Office and UNITED RENTALS
The main advantage of trading using opposite Alstria Office and UNITED RENTALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alstria Office 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.| Alstria Office vs. PKSHA TECHNOLOGY INC | Alstria Office vs. Minerals Technologies | Alstria Office vs. Playtech plc | Alstria Office vs. Sunny Optical Technology |
| UNITED RENTALS vs. MCEWEN MINING INC | UNITED RENTALS vs. GALENA MINING LTD | UNITED RENTALS vs. alstria office REIT AG | UNITED RENTALS vs. KENEDIX OFFICE INV |
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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