Correlation Between De Grey and United Rentals
Can any of the company-specific risk be diversified away by investing in both De Grey 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 De Grey and United Rentals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between De Grey Mining and United Rentals, you can compare the effects of market volatilities on De Grey 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 De Grey with a short position of United Rentals. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Grey and United Rentals.
Diversification Opportunities for De Grey and United Rentals
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DGD and United is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding De Grey Mining and United Rentals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Rentals and De Grey 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 De Grey Mining 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 De Grey i.e., De Grey and United Rentals go up and down completely randomly.
Pair Corralation between De Grey and United Rentals
Assuming the 90 days trading horizon De Grey is expected to generate 2.0 times less return on investment than United Rentals. In addition to that, De Grey is 1.31 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 0.06 per unit of volatility. If you would invest 34,075 in United Rentals on October 13, 2024 and sell it today you would earn a total of 30,545 from holding United Rentals or generate 89.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
De Grey Mining vs. United Rentals
Performance |
| Timeline |
| De Grey Mining |
| United Rentals |
De Grey and United Rentals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with De Grey and United Rentals
The main advantage of trading using opposite De Grey and United Rentals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Grey 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.| De Grey vs. TRADEGATE | De Grey vs. Canon Marketing Japan | De Grey vs. Cincinnati Financial Corp | De Grey vs. JSC Halyk bank |
| United Rentals vs. De Grey Mining | United Rentals vs. GREENX METALS LTD | United Rentals vs. Jupiter Fund Management | United Rentals vs. FIREWEED METALS P |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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