Correlation Between PT Hexindo and United Rentals
Can any of the company-specific risk be diversified away by investing in both PT Hexindo 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 PT Hexindo and United Rentals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Hexindo Adiperkasa and United Rentals, you can compare the effects of market volatilities on PT Hexindo 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 PT Hexindo with a short position of United Rentals. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Hexindo and United Rentals.
Diversification Opportunities for PT Hexindo and United Rentals
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between HX1A and United is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding PT Hexindo Adiperkasa and United Rentals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Rentals and PT Hexindo 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 PT Hexindo Adiperkasa 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 PT Hexindo i.e., PT Hexindo and United Rentals go up and down completely randomly.
Pair Corralation between PT Hexindo and United Rentals
Assuming the 90 days trading horizon PT Hexindo Adiperkasa is expected to under-perform the United Rentals. In addition to that, PT Hexindo is 1.4 times more volatile than United Rentals. It trades about -0.25 of its total potential returns per unit of risk. United Rentals is currently generating about 0.13 per unit of volatility. If you would invest 75,010 in United Rentals on August 27, 2024 and sell it today you would earn a total of 6,630 from holding United Rentals or generate 8.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Hexindo Adiperkasa vs. United Rentals
Performance |
| Timeline |
| PT Hexindo Adiperkasa |
| United Rentals |
PT Hexindo and United Rentals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Hexindo and United Rentals
The main advantage of trading using opposite PT Hexindo and United Rentals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Hexindo 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.| PT Hexindo vs. United Rentals | PT Hexindo vs. Superior Plus Corp | PT Hexindo vs. NMI Holdings | PT Hexindo vs. Origin Agritech |
| United Rentals vs. Superior Plus Corp | United Rentals vs. NMI Holdings | United Rentals vs. Origin Agritech | United Rentals vs. SIVERS SEMICONDUCTORS AB |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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