Correlation Between United Rentals and Boiron SA
Can any of the company-specific risk be diversified away by investing in both United Rentals and Boiron SA 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 Boiron SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Boiron SA, you can compare the effects of market volatilities on United Rentals and Boiron SA 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 Boiron SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Boiron SA.
Diversification Opportunities for United Rentals and Boiron SA
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between United and Boiron is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Boiron SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boiron SA 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 Boiron SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boiron SA has no effect on the direction of United Rentals i.e., United Rentals and Boiron SA go up and down completely randomly.
Pair Corralation between United Rentals and Boiron SA
Assuming the 90 days horizon United Rentals is expected to generate 1.3 times more return on investment than Boiron SA. However, United Rentals is 1.3 times more volatile than Boiron SA. It trades about 0.01 of its potential returns per unit of risk. Boiron SA is currently generating about -0.12 per unit of risk. If you would invest 70,838 in United Rentals on September 25, 2024 and sell it today you would lose (518.00) from holding United Rentals or give up 0.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Rentals vs. Boiron SA
Performance |
| Timeline |
| United Rentals |
| Boiron SA |
United Rentals and Boiron SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Boiron SA
The main advantage of trading using opposite United Rentals and Boiron SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Boiron SA 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 Boiron SA will offset losses from the drop in Boiron SA's long position.| United Rentals vs. Ashtead Group plc | United Rentals vs. WillScot Mobile Mini | United Rentals vs. Avis Budget Group | United Rentals vs. Sixt SE |
| Boiron SA vs. PT Ace Hardware | Boiron SA vs. PKSHA TECHNOLOGY INC | Boiron SA vs. FANDIFI TECHNOLOGY P | Boiron SA vs. Flowers Foods |
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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