Correlation Between Boiron SA and United Rentals
Can any of the company-specific risk be diversified away by investing in both Boiron SA 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 Boiron SA and United Rentals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boiron SA and United Rentals, you can compare the effects of market volatilities on Boiron SA 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 Boiron SA with a short position of United Rentals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boiron SA and United Rentals.
Diversification Opportunities for Boiron SA and United Rentals
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Boiron and United is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Boiron SA and United Rentals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Rentals and Boiron SA 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 Boiron SA 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 Boiron SA i.e., Boiron SA and United Rentals go up and down completely randomly.
Pair Corralation between Boiron SA and United Rentals
Assuming the 90 days horizon Boiron SA is expected to generate 1.53 times more return on investment than United Rentals. However, Boiron SA is 1.53 times more volatile than United Rentals. It trades about -0.16 of its potential returns per unit of risk. United Rentals is currently generating about -0.26 per unit of risk. If you would invest 2,960 in Boiron SA on September 21, 2024 and sell it today you would lose (290.00) from holding Boiron SA or give up 9.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boiron SA vs. United Rentals
Performance |
| Timeline |
| Boiron SA |
| United Rentals |
Boiron SA and United Rentals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boiron SA and United Rentals
The main advantage of trading using opposite Boiron SA and United Rentals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boiron SA 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.| Boiron SA vs. Superior Plus Corp | Boiron SA vs. SIVERS SEMICONDUCTORS AB | Boiron SA vs. NorAm Drilling AS | Boiron SA vs. Norsk Hydro ASA |
| United Rentals vs. USWE SPORTS AB | United Rentals vs. Altair Engineering | United Rentals vs. Air Transport Services | United Rentals vs. LAir Liquide SA |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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