Correlation Between UNITED RENTALS and COVIVIO HOTELS
Can any of the company-specific risk be diversified away by investing in both UNITED RENTALS and COVIVIO HOTELS 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 COVIVIO HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNITED RENTALS and COVIVIO HOTELS INH, you can compare the effects of market volatilities on UNITED RENTALS and COVIVIO HOTELS 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 COVIVIO HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNITED RENTALS and COVIVIO HOTELS.
Diversification Opportunities for UNITED RENTALS and COVIVIO HOTELS
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between UNITED and COVIVIO is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding UNITED RENTALS and COVIVIO HOTELS INH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COVIVIO HOTELS INH 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 COVIVIO HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COVIVIO HOTELS INH has no effect on the direction of UNITED RENTALS i.e., UNITED RENTALS and COVIVIO HOTELS go up and down completely randomly.
Pair Corralation between UNITED RENTALS and COVIVIO HOTELS
Assuming the 90 days trading horizon UNITED RENTALS is expected to generate 1.57 times more return on investment than COVIVIO HOTELS. However, UNITED RENTALS is 1.57 times more volatile than COVIVIO HOTELS INH. It trades about 0.07 of its potential returns per unit of risk. COVIVIO HOTELS INH is currently generating about 0.05 per unit of risk. If you would invest 40,689 in UNITED RENTALS on October 27, 2024 and sell it today you would earn a total of 34,231 from holding UNITED RENTALS or generate 84.13% 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. COVIVIO HOTELS INH
Performance |
| Timeline |
| UNITED RENTALS |
| COVIVIO HOTELS INH |
UNITED RENTALS and COVIVIO HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNITED RENTALS and COVIVIO HOTELS
The main advantage of trading using opposite UNITED RENTALS and COVIVIO HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNITED RENTALS position performs unexpectedly, COVIVIO HOTELS 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 COVIVIO HOTELS will offset losses from the drop in COVIVIO HOTELS's long position.| UNITED RENTALS vs. CLOVER HEALTH INV | UNITED RENTALS vs. Silicon Motion Technology | UNITED RENTALS vs. Phibro Animal Health | UNITED RENTALS vs. SEKISUI CHEMICAL |
| COVIVIO HOTELS vs. Lifeway Foods | COVIVIO HOTELS vs. Maple Leaf Foods | COVIVIO HOTELS vs. PLANT VEDA FOODS | COVIVIO HOTELS vs. NTG Nordic Transport |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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