Correlation Between DFS Furniture and UNITED RENTALS
Can any of the company-specific risk be diversified away by investing in both DFS Furniture 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 DFS Furniture and UNITED RENTALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DFS Furniture PLC and UNITED RENTALS, you can compare the effects of market volatilities on DFS Furniture 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 DFS Furniture with a short position of UNITED RENTALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFS Furniture and UNITED RENTALS.
Diversification Opportunities for DFS Furniture and UNITED RENTALS
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between DFS and UNITED is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding DFS Furniture PLC and UNITED RENTALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITED RENTALS and DFS Furniture 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 DFS Furniture PLC 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 DFS Furniture i.e., DFS Furniture and UNITED RENTALS go up and down completely randomly.
Pair Corralation between DFS Furniture and UNITED RENTALS
Assuming the 90 days trading horizon DFS Furniture PLC is expected to generate 0.77 times more return on investment than UNITED RENTALS. However, DFS Furniture PLC is 1.29 times less risky than UNITED RENTALS. It trades about 0.22 of its potential returns per unit of risk. UNITED RENTALS is currently generating about -0.43 per unit of risk. If you would invest 155.00 in DFS Furniture PLC on November 28, 2024 and sell it today you would earn a total of 11.00 from holding DFS Furniture PLC or generate 7.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DFS Furniture PLC vs. UNITED RENTALS
Performance |
| Timeline |
| DFS Furniture PLC |
| UNITED RENTALS |
DFS Furniture and UNITED RENTALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFS Furniture and UNITED RENTALS
The main advantage of trading using opposite DFS Furniture and UNITED RENTALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFS Furniture 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.| DFS Furniture vs. GOME Retail Holdings | DFS Furniture vs. Caseys General Stores | DFS Furniture vs. MARKET VECTR RETAIL | DFS Furniture vs. PLANT VEDA FOODS |
| UNITED RENTALS vs. Columbia Sportswear | UNITED RENTALS vs. MOLSON RS BEVERAGE | UNITED RENTALS vs. UNIVERSAL DISPLAY | UNITED RENTALS vs. InPlay Oil Corp |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |