Correlation Between DAX Index and UNITED RENTALS
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By analyzing existing cross correlation between DAX Index and UNITED RENTALS, you can compare the effects of market volatilities on DAX Index 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 DAX Index with a short position of UNITED RENTALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and UNITED RENTALS.
Diversification Opportunities for DAX Index and UNITED RENTALS
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DAX and UNITED is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and UNITED RENTALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITED RENTALS and DAX Index 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 DAX Index 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 DAX Index i.e., DAX Index and UNITED RENTALS go up and down completely randomly.
Pair Corralation between DAX Index and UNITED RENTALS
Assuming the 90 days trading horizon DAX Index is expected to generate 3.12 times less return on investment than UNITED RENTALS. But when comparing it to its historical volatility, DAX Index is 2.78 times less risky than UNITED RENTALS. It trades about 0.14 of its potential returns per unit of risk. UNITED RENTALS is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 74,191 in UNITED RENTALS on September 1, 2024 and sell it today you would earn a total of 6,529 from holding UNITED RENTALS or generate 8.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. UNITED RENTALS
Performance |
| Timeline |
DAX Index and UNITED RENTALS Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
UNITED RENTALS
Pair trading matchups for UNITED RENTALS
Pair Trading with DAX Index and UNITED RENTALS
The main advantage of trading using opposite DAX Index and UNITED RENTALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index 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.| DAX Index vs. BE Semiconductor Industries | DAX Index vs. REGAL ASIAN INVESTMENTS | DAX Index vs. SEI INVESTMENTS | DAX Index vs. National Beverage Corp |
| UNITED RENTALS vs. PT Global Mediacom | UNITED RENTALS vs. INTERSHOP Communications Aktiengesellschaft | UNITED RENTALS vs. Beijing Media | UNITED RENTALS vs. Iridium Communications |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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