Correlation Between COMBA TELECOM and United Rentals
Can any of the company-specific risk be diversified away by investing in both COMBA TELECOM 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 COMBA TELECOM and United Rentals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COMBA TELECOM SYST and United Rentals, you can compare the effects of market volatilities on COMBA TELECOM 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 COMBA TELECOM with a short position of United Rentals. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMBA TELECOM and United Rentals.
Diversification Opportunities for COMBA TELECOM and United Rentals
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between COMBA and United is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding COMBA TELECOM SYST and United Rentals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Rentals and COMBA TELECOM 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 COMBA TELECOM SYST 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 COMBA TELECOM i.e., COMBA TELECOM and United Rentals go up and down completely randomly.
Pair Corralation between COMBA TELECOM and United Rentals
Assuming the 90 days trading horizon COMBA TELECOM SYST is expected to generate 3.39 times more return on investment than United Rentals. However, COMBA TELECOM is 3.39 times more volatile than United Rentals. It trades about 0.02 of its potential returns per unit of risk. United Rentals is currently generating about -0.61 per unit of risk. If you would invest 13.00 in COMBA TELECOM SYST on October 14, 2024 and sell it today you would earn a total of 0.00 from holding COMBA TELECOM SYST or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COMBA TELECOM SYST vs. United Rentals
Performance |
| Timeline |
| COMBA TELECOM SYST |
| United Rentals |
COMBA TELECOM and United Rentals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COMBA TELECOM and United Rentals
The main advantage of trading using opposite COMBA TELECOM and United Rentals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COMBA TELECOM 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.| COMBA TELECOM vs. ANGANG STEEL H | COMBA TELECOM vs. NEW MILLENNIUM IRON | COMBA TELECOM vs. Nippon Steel | COMBA TELECOM vs. Tianjin Capital Environmental |
| United Rentals vs. Southwest Airlines Co | United Rentals vs. SINGAPORE AIRLINES | United Rentals vs. COMBA TELECOM SYST | United Rentals vs. Telecom Argentina 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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