Correlation Between United Rentals and Khiron Life

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Can any of the company-specific risk be diversified away by investing in both United Rentals and Khiron Life 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 Khiron Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Khiron Life Sciences, you can compare the effects of market volatilities on United Rentals and Khiron Life 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 Khiron Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Khiron Life.

Diversification Opportunities for United Rentals and Khiron Life

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between United and Khiron is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Khiron Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Khiron Life Sciences 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 Khiron Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Khiron Life Sciences has no effect on the direction of United Rentals i.e., United Rentals and Khiron Life go up and down completely randomly.

Pair Corralation between United Rentals and Khiron Life

If you would invest  66,427  in United Rentals on November 2, 2024 and sell it today you would earn a total of  6,773  from holding United Rentals or generate 10.2% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

United Rentals  vs.  Khiron Life Sciences

 Performance 
       Timeline  
United Rentals 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in United Rentals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, United Rentals is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.
Khiron Life Sciences 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Khiron Life Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Khiron Life is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

United Rentals and Khiron Life Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with United Rentals and Khiron Life

The main advantage of trading using opposite United Rentals and Khiron Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Khiron Life 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 Khiron Life will offset losses from the drop in Khiron Life's long position.
The idea behind United Rentals and Khiron Life Sciences pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

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