Correlation Between Cemepe Investimentos and United Rentals
Can any of the company-specific risk be diversified away by investing in both Cemepe Investimentos 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 Cemepe Investimentos and United Rentals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cemepe Investimentos SA and United Rentals, you can compare the effects of market volatilities on Cemepe Investimentos 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 Cemepe Investimentos with a short position of United Rentals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cemepe Investimentos and United Rentals.
Diversification Opportunities for Cemepe Investimentos and United Rentals
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cemepe and United is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Cemepe Investimentos SA and United Rentals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Rentals and Cemepe Investimentos 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 Cemepe Investimentos SA 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 Cemepe Investimentos i.e., Cemepe Investimentos and United Rentals go up and down completely randomly.
Pair Corralation between Cemepe Investimentos and United Rentals
Assuming the 90 days trading horizon Cemepe Investimentos SA is expected to under-perform the United Rentals. In addition to that, Cemepe Investimentos is 1.67 times more volatile than United Rentals. It trades about -0.04 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 12,312 in United Rentals on September 3, 2024 and sell it today you would earn a total of 6,301 from holding United Rentals or generate 51.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.33% |
| Values | Daily Returns |
Cemepe Investimentos SA vs. United Rentals
Performance |
| Timeline |
| Cemepe Investimentos |
| United Rentals |
Cemepe Investimentos and United Rentals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cemepe Investimentos and United Rentals
The main advantage of trading using opposite Cemepe Investimentos and United Rentals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cemepe Investimentos 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.| Cemepe Investimentos vs. Warner Music Group | Cemepe Investimentos vs. United Rentals | Cemepe Investimentos vs. Marvell Technology | Cemepe Investimentos vs. Iron Mountain Incorporated |
| United Rentals vs. Localiza Rent a | United Rentals vs. Movida Participaes SA | United Rentals vs. Fundo Investimento Imobiliario | United Rentals vs. Fras le SA |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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