Correlation Between UNITED RENTALS and MOVIE GAMES
Can any of the company-specific risk be diversified away by investing in both UNITED RENTALS and MOVIE GAMES 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 MOVIE GAMES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNITED RENTALS and MOVIE GAMES SA, you can compare the effects of market volatilities on UNITED RENTALS and MOVIE GAMES 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 MOVIE GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNITED RENTALS and MOVIE GAMES.
Diversification Opportunities for UNITED RENTALS and MOVIE GAMES
-0.92 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between UNITED and MOVIE is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding UNITED RENTALS and MOVIE GAMES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOVIE GAMES SA 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 MOVIE GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOVIE GAMES SA has no effect on the direction of UNITED RENTALS i.e., UNITED RENTALS and MOVIE GAMES go up and down completely randomly.
Pair Corralation between UNITED RENTALS and MOVIE GAMES
Assuming the 90 days trading horizon UNITED RENTALS is expected to generate 0.69 times more return on investment than MOVIE GAMES. However, UNITED RENTALS is 1.45 times less risky than MOVIE GAMES. It trades about 0.09 of its potential returns per unit of risk. MOVIE GAMES SA is currently generating about -0.13 per unit of risk. If you would invest 61,195 in UNITED RENTALS on September 3, 2024 and sell it today you would earn a total of 19,525 from holding UNITED RENTALS or generate 31.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UNITED RENTALS vs. MOVIE GAMES SA
Performance |
| Timeline |
| UNITED RENTALS |
| MOVIE GAMES SA |
UNITED RENTALS and MOVIE GAMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNITED RENTALS and MOVIE GAMES
The main advantage of trading using opposite UNITED RENTALS and MOVIE GAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNITED RENTALS position performs unexpectedly, MOVIE GAMES 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 MOVIE GAMES will offset losses from the drop in MOVIE GAMES's long position.| UNITED RENTALS vs. Universal Display | UNITED RENTALS vs. PLAYTIKA HOLDING DL 01 | UNITED RENTALS vs. Ming Le Sports | UNITED RENTALS vs. JD SPORTS FASH |
| MOVIE GAMES vs. LION ONE METALS | MOVIE GAMES vs. Silicon Motion Technology | MOVIE GAMES vs. Perseus Mining Limited | MOVIE GAMES vs. China BlueChemical |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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