Correlation Between UNITED RENTALS and PT Astra
Can any of the company-specific risk be diversified away by investing in both UNITED RENTALS and PT Astra 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 PT Astra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNITED RENTALS and PT Astra International, you can compare the effects of market volatilities on UNITED RENTALS and PT Astra 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 PT Astra. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNITED RENTALS and PT Astra.
Diversification Opportunities for UNITED RENTALS and PT Astra
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between UNITED and ASJA is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding UNITED RENTALS and PT Astra International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Astra International 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 PT Astra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Astra International has no effect on the direction of UNITED RENTALS i.e., UNITED RENTALS and PT Astra go up and down completely randomly.
Pair Corralation between UNITED RENTALS and PT Astra
Assuming the 90 days trading horizon UNITED RENTALS is expected to generate 0.61 times more return on investment than PT Astra. However, UNITED RENTALS is 1.65 times less risky than PT Astra. It trades about 0.16 of its potential returns per unit of risk. PT Astra International is currently generating about 0.06 per unit of risk. If you would invest 74,191 in UNITED RENTALS on September 1, 2024 and sell it today you would earn a total of 6,529 from holding UNITED RENTALS or generate 8.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UNITED RENTALS vs. PT Astra International
Performance |
| Timeline |
| UNITED RENTALS |
| PT Astra International |
UNITED RENTALS and PT Astra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNITED RENTALS and PT Astra
The main advantage of trading using opposite UNITED RENTALS and PT Astra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNITED RENTALS position performs unexpectedly, PT Astra 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 PT Astra will offset losses from the drop in PT Astra's long position.| UNITED RENTALS vs. PT Global Mediacom | UNITED RENTALS vs. INTERSHOP Communications Aktiengesellschaft | UNITED RENTALS vs. Beijing Media | UNITED RENTALS vs. Iridium Communications |
| PT Astra vs. UNIVERSAL MUSIC GROUP | PT Astra vs. Pembina Pipeline Corp | PT Astra vs. CHEMICAL INDUSTRIES | PT Astra vs. UNIVMUSIC GRPADR050 |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |