Correlation Between United Rentals and Livetech
Can any of the company-specific risk be diversified away by investing in both United Rentals and Livetech 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 United Rentals and Livetech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Livetech da Bahia, you can compare the effects of market volatilities on United Rentals and Livetech 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 United Rentals with a short position of Livetech. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Livetech.
Diversification Opportunities for United Rentals and Livetech
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and Livetech is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Livetech da Bahia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Livetech da Bahia and United Rentals 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 United Rentals are associated (or correlated) with Livetech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Livetech da Bahia has no effect on the direction of United Rentals i.e., United Rentals and Livetech go up and down completely randomly.
Pair Corralation between United Rentals and Livetech
Assuming the 90 days trading horizon United Rentals is expected to generate 2.34 times more return on investment than Livetech. However, United Rentals is 2.34 times more volatile than Livetech da Bahia. It trades about 0.15 of its potential returns per unit of risk. Livetech da Bahia is currently generating about -0.52 per unit of risk. If you would invest 16,843 in United Rentals on August 31, 2024 and sell it today you would earn a total of 1,847 from holding United Rentals or generate 10.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Rentals vs. Livetech da Bahia
Performance |
| Timeline |
| United Rentals |
| Livetech da Bahia |
United Rentals and Livetech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Livetech
The main advantage of trading using opposite United Rentals and Livetech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Livetech 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 Livetech will offset losses from the drop in Livetech's long position.| United Rentals vs. Localiza Rent a | United Rentals vs. Vamos Locao de | United Rentals vs. Movida Participaes SA |
| Livetech vs. SVB Financial Group | Livetech vs. Credit Acceptance | Livetech vs. Zoom Video Communications | Livetech vs. Charter 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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