Correlation Between United Rentals and COLUMBIA SPORTSWEAR
Can any of the company-specific risk be diversified away by investing in both United Rentals and COLUMBIA SPORTSWEAR 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 COLUMBIA SPORTSWEAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and COLUMBIA SPORTSWEAR, you can compare the effects of market volatilities on United Rentals and COLUMBIA SPORTSWEAR 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 COLUMBIA SPORTSWEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and COLUMBIA SPORTSWEAR.
Diversification Opportunities for United Rentals and COLUMBIA SPORTSWEAR
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between United and COLUMBIA is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and COLUMBIA SPORTSWEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COLUMBIA SPORTSWEAR 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 COLUMBIA SPORTSWEAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COLUMBIA SPORTSWEAR has no effect on the direction of United Rentals i.e., United Rentals and COLUMBIA SPORTSWEAR go up and down completely randomly.
Pair Corralation between United Rentals and COLUMBIA SPORTSWEAR
Assuming the 90 days horizon United Rentals is expected to under-perform the COLUMBIA SPORTSWEAR. But the stock apears to be less risky and, when comparing its historical volatility, United Rentals is 1.18 times less risky than COLUMBIA SPORTSWEAR. The stock trades about -0.29 of its potential returns per unit of risk. The COLUMBIA SPORTSWEAR is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 8,550 in COLUMBIA SPORTSWEAR on December 3, 2024 and sell it today you would earn a total of 100.00 from holding COLUMBIA SPORTSWEAR or generate 1.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Rentals vs. COLUMBIA SPORTSWEAR
Performance |
| Timeline |
| United Rentals |
| COLUMBIA SPORTSWEAR |
United Rentals and COLUMBIA SPORTSWEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and COLUMBIA SPORTSWEAR
The main advantage of trading using opposite United Rentals and COLUMBIA SPORTSWEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, COLUMBIA SPORTSWEAR 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 COLUMBIA SPORTSWEAR will offset losses from the drop in COLUMBIA SPORTSWEAR's long position.| United Rentals vs. SOLSTAD OFFSHORE NK | United Rentals vs. Southwest Airlines Co | United Rentals vs. Hitachi Construction Machinery | United Rentals vs. TITAN MACHINERY |
| COLUMBIA SPORTSWEAR vs. Aegean Airlines SA | COLUMBIA SPORTSWEAR vs. AIR PRODCHEMICALS | COLUMBIA SPORTSWEAR vs. United Airlines Holdings | COLUMBIA SPORTSWEAR vs. X FAB Silicon Foundries |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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