Correlation Between UNITED RENTALS and NAKED WINES
Can any of the company-specific risk be diversified away by investing in both UNITED RENTALS and NAKED WINES 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 NAKED WINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNITED RENTALS and NAKED WINES PLC, you can compare the effects of market volatilities on UNITED RENTALS and NAKED WINES 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 NAKED WINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNITED RENTALS and NAKED WINES.
Diversification Opportunities for UNITED RENTALS and NAKED WINES
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between UNITED and NAKED is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding UNITED RENTALS and NAKED WINES PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAKED WINES PLC 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 NAKED WINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAKED WINES PLC has no effect on the direction of UNITED RENTALS i.e., UNITED RENTALS and NAKED WINES go up and down completely randomly.
Pair Corralation between UNITED RENTALS and NAKED WINES
Assuming the 90 days trading horizon UNITED RENTALS is expected to generate 0.88 times more return on investment than NAKED WINES. However, UNITED RENTALS is 1.14 times less risky than NAKED WINES. It trades about 0.22 of its potential returns per unit of risk. NAKED WINES PLC is currently generating about -0.15 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UNITED RENTALS vs. NAKED WINES PLC
Performance |
| Timeline |
| UNITED RENTALS |
| NAKED WINES PLC |
UNITED RENTALS and NAKED WINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNITED RENTALS and NAKED WINES
The main advantage of trading using opposite UNITED RENTALS and NAKED WINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNITED RENTALS position performs unexpectedly, NAKED WINES 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 NAKED WINES will offset losses from the drop in NAKED WINES'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 |
| NAKED WINES vs. CHINA TONTINE WINES | NAKED WINES vs. Superior Plus Corp | NAKED WINES vs. NMI Holdings | NAKED WINES vs. Origin Agritech |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |