Correlation Between UNITED RENTALS and Lenovo Group
Can any of the company-specific risk be diversified away by investing in both UNITED RENTALS and Lenovo Group 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 Lenovo Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNITED RENTALS and Lenovo Group Limited, you can compare the effects of market volatilities on UNITED RENTALS and Lenovo Group 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 Lenovo Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNITED RENTALS and Lenovo Group.
Diversification Opportunities for UNITED RENTALS and Lenovo Group
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between UNITED and Lenovo is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding UNITED RENTALS and Lenovo Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lenovo Group Limited 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 Lenovo Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lenovo Group Limited has no effect on the direction of UNITED RENTALS i.e., UNITED RENTALS and Lenovo Group go up and down completely randomly.
Pair Corralation between UNITED RENTALS and Lenovo Group
Assuming the 90 days trading horizon UNITED RENTALS is expected to generate 0.73 times more return on investment than Lenovo Group. However, UNITED RENTALS is 1.37 times less risky than Lenovo Group. It trades about 0.22 of its potential returns per unit of risk. Lenovo Group Limited is currently generating about 0.0 per unit of risk. If you would invest 72,235 in UNITED RENTALS on September 3, 2024 and sell it today you would earn a total of 8,485 from holding UNITED RENTALS or generate 11.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UNITED RENTALS vs. Lenovo Group Limited
Performance |
| Timeline |
| UNITED RENTALS |
| Lenovo Group Limited |
UNITED RENTALS and Lenovo Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNITED RENTALS and Lenovo Group
The main advantage of trading using opposite UNITED RENTALS and Lenovo Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNITED RENTALS position performs unexpectedly, Lenovo Group 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 Lenovo Group will offset losses from the drop in Lenovo Group'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 |
| Lenovo Group vs. UNITED RENTALS | Lenovo Group vs. LION ONE METALS | Lenovo Group vs. PARKEN Sport Entertainment | Lenovo Group vs. WILLIS LEASE FIN |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |