Correlation Between Easy Software and United Rentals
Can any of the company-specific risk be diversified away by investing in both Easy Software 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 Easy Software and United Rentals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Easy Software AG and United Rentals, you can compare the effects of market volatilities on Easy Software 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 Easy Software with a short position of United Rentals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Easy Software and United Rentals.
Diversification Opportunities for Easy Software and United Rentals
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Easy and United is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Easy Software AG and United Rentals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Rentals and Easy Software 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 Easy Software AG 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 Easy Software i.e., Easy Software and United Rentals go up and down completely randomly.
Pair Corralation between Easy Software and United Rentals
Assuming the 90 days trading horizon Easy Software AG is expected to under-perform the United Rentals. In addition to that, Easy Software is 1.39 times more volatile than United Rentals. It trades about -0.03 of its total potential returns per unit of risk. United Rentals is currently generating about 0.16 per unit of volatility. If you would invest 67,060 in United Rentals on November 5, 2024 and sell it today you would earn a total of 5,200 from holding United Rentals or generate 7.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Easy Software AG vs. United Rentals
Performance |
| Timeline |
| Easy Software AG |
| United Rentals |
Easy Software and United Rentals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Easy Software and United Rentals
The main advantage of trading using opposite Easy Software and United Rentals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Easy Software 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.| Easy Software vs. Sunny Optical Technology | Easy Software vs. Agilent Technologies | Easy Software vs. AAC TECHNOLOGHLDGADR | Easy Software vs. Kingdee International Software |
| United Rentals vs. MidCap Financial Investment | United Rentals vs. CREO MEDICAL GRP | United Rentals vs. Keck Seng Investments | United Rentals vs. CompuGroup Medical SE |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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