Correlation Between Marie Brizard and United Rentals
Can any of the company-specific risk be diversified away by investing in both Marie Brizard 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 Marie Brizard and United Rentals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marie Brizard Wine and United Rentals, you can compare the effects of market volatilities on Marie Brizard 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 Marie Brizard with a short position of United Rentals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marie Brizard and United Rentals.
Diversification Opportunities for Marie Brizard and United Rentals
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Marie and United is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Marie Brizard Wine and United Rentals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Rentals and Marie Brizard 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 Marie Brizard Wine 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 Marie Brizard i.e., Marie Brizard and United Rentals go up and down completely randomly.
Pair Corralation between Marie Brizard and United Rentals
Assuming the 90 days trading horizon Marie Brizard Wine is expected to generate 0.68 times more return on investment than United Rentals. However, Marie Brizard Wine is 1.48 times less risky than United Rentals. It trades about -0.15 of its potential returns per unit of risk. United Rentals is currently generating about -0.47 per unit of risk. If you would invest 388.00 in Marie Brizard Wine on October 16, 2024 and sell it today you would lose (10.00) from holding Marie Brizard Wine or give up 2.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marie Brizard Wine vs. United Rentals
Performance |
| Timeline |
| Marie Brizard Wine |
| United Rentals |
Marie Brizard and United Rentals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marie Brizard and United Rentals
The main advantage of trading using opposite Marie Brizard and United Rentals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marie Brizard 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.| Marie Brizard vs. MARKET VECTR RETAIL | Marie Brizard vs. Flowers Foods | Marie Brizard vs. INDOFOOD AGRI RES | Marie Brizard vs. Indutrade AB |
| United Rentals vs. Sumitomo Mitsui Construction | United Rentals vs. Marie Brizard Wine | United Rentals vs. GAMING FAC SA | United Rentals vs. Dairy Farm International |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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