Correlation Between UNITED RENTALS and FUYO GENERAL
Can any of the company-specific risk be diversified away by investing in both UNITED RENTALS and FUYO GENERAL 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 FUYO GENERAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNITED RENTALS and FUYO GENERAL LEASE, you can compare the effects of market volatilities on UNITED RENTALS and FUYO GENERAL 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 FUYO GENERAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNITED RENTALS and FUYO GENERAL.
Diversification Opportunities for UNITED RENTALS and FUYO GENERAL
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UNITED and FUYO is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding UNITED RENTALS and FUYO GENERAL LEASE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUYO GENERAL LEASE 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 FUYO GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUYO GENERAL LEASE has no effect on the direction of UNITED RENTALS i.e., UNITED RENTALS and FUYO GENERAL go up and down completely randomly.
Pair Corralation between UNITED RENTALS and FUYO GENERAL
Assuming the 90 days trading horizon UNITED RENTALS is expected to generate 1.9 times more return on investment than FUYO GENERAL. However, UNITED RENTALS is 1.9 times more volatile than FUYO GENERAL LEASE. It trades about 0.15 of its potential returns per unit of risk. FUYO GENERAL LEASE is currently generating about 0.24 per unit of risk. If you would invest 74,970 in UNITED RENTALS on August 28, 2024 and sell it today you would earn a total of 6,090 from holding UNITED RENTALS or generate 8.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UNITED RENTALS vs. FUYO GENERAL LEASE
Performance |
| Timeline |
| UNITED RENTALS |
| FUYO GENERAL LEASE |
UNITED RENTALS and FUYO GENERAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNITED RENTALS and FUYO GENERAL
The main advantage of trading using opposite UNITED RENTALS and FUYO GENERAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNITED RENTALS position performs unexpectedly, FUYO GENERAL 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 FUYO GENERAL will offset losses from the drop in FUYO GENERAL's long position.| UNITED RENTALS vs. Laureate Education | UNITED RENTALS vs. Darden Restaurants | UNITED RENTALS vs. MEDICAL FACILITIES NEW | UNITED RENTALS vs. ScanSource |
| FUYO GENERAL vs. Superior Plus Corp | FUYO GENERAL vs. NMI Holdings | FUYO GENERAL vs. Origin Agritech | FUYO GENERAL vs. SIVERS SEMICONDUCTORS AB |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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