Correlation Between ANGANG STEEL and UNITED RENTALS
Can any of the company-specific risk be diversified away by investing in both ANGANG STEEL 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 ANGANG STEEL and UNITED RENTALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANGANG STEEL H and UNITED RENTALS, you can compare the effects of market volatilities on ANGANG STEEL 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 ANGANG STEEL with a short position of UNITED RENTALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGANG STEEL and UNITED RENTALS.
Diversification Opportunities for ANGANG STEEL and UNITED RENTALS
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between ANGANG and UNITED is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding ANGANG STEEL H and UNITED RENTALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITED RENTALS and ANGANG STEEL 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 ANGANG STEEL H 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 ANGANG STEEL i.e., ANGANG STEEL and UNITED RENTALS go up and down completely randomly.
Pair Corralation between ANGANG STEEL and UNITED RENTALS
Assuming the 90 days trading horizon ANGANG STEEL H is expected to generate 1.67 times more return on investment than UNITED RENTALS. However, ANGANG STEEL is 1.67 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 -0.09 per unit of risk. If you would invest 17.00 in ANGANG STEEL H on October 25, 2024 and sell it today you would earn a total of 0.00 from holding ANGANG STEEL H or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANGANG STEEL H vs. UNITED RENTALS
Performance |
| Timeline |
| ANGANG STEEL H |
| UNITED RENTALS |
ANGANG STEEL and UNITED RENTALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANGANG STEEL and UNITED RENTALS
The main advantage of trading using opposite ANGANG STEEL and UNITED RENTALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGANG STEEL 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.| ANGANG STEEL vs. Apple Inc | ANGANG STEEL vs. Apple Inc | ANGANG STEEL vs. Apple Inc | ANGANG STEEL vs. Apple Inc |
| UNITED RENTALS vs. Apple Inc | UNITED RENTALS vs. Apple Inc | UNITED RENTALS vs. Apple Inc | UNITED RENTALS vs. Apple Inc |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |