Correlation Between SEKISUI CHEMICAL and UNITED RENTALS
Can any of the company-specific risk be diversified away by investing in both SEKISUI CHEMICAL 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 SEKISUI CHEMICAL and UNITED RENTALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEKISUI CHEMICAL and UNITED RENTALS, you can compare the effects of market volatilities on SEKISUI CHEMICAL 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 SEKISUI CHEMICAL with a short position of UNITED RENTALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEKISUI CHEMICAL and UNITED RENTALS.
Diversification Opportunities for SEKISUI CHEMICAL and UNITED RENTALS
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SEKISUI and UNITED is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding SEKISUI CHEMICAL and UNITED RENTALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITED RENTALS and SEKISUI CHEMICAL 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 SEKISUI CHEMICAL 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 SEKISUI CHEMICAL i.e., SEKISUI CHEMICAL and UNITED RENTALS go up and down completely randomly.
Pair Corralation between SEKISUI CHEMICAL and UNITED RENTALS
Assuming the 90 days trading horizon SEKISUI CHEMICAL is expected to under-perform the UNITED RENTALS. But the stock apears to be less risky and, when comparing its historical volatility, SEKISUI CHEMICAL is 1.18 times less risky than UNITED RENTALS. The stock trades about -0.08 of its potential returns per unit of risk. The UNITED RENTALS is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 66,980 in UNITED RENTALS on November 5, 2024 and sell it today you would earn a total of 5,520 from holding UNITED RENTALS or generate 8.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEKISUI CHEMICAL vs. UNITED RENTALS
Performance |
| Timeline |
| SEKISUI CHEMICAL |
| UNITED RENTALS |
SEKISUI CHEMICAL and UNITED RENTALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEKISUI CHEMICAL and UNITED RENTALS
The main advantage of trading using opposite SEKISUI CHEMICAL and UNITED RENTALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEKISUI CHEMICAL 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.| SEKISUI CHEMICAL vs. Guangdong Investment Limited | SEKISUI CHEMICAL vs. TT Electronics PLC | SEKISUI CHEMICAL vs. Benchmark Electronics | SEKISUI CHEMICAL vs. New Residential Investment |
| UNITED RENTALS vs. Transport International Holdings | UNITED RENTALS vs. Aluminum of | UNITED RENTALS vs. China Medical System | UNITED RENTALS vs. ARDAGH METAL PACDL 0001 |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |