Correlation Between United Rentals and C PARAN
Can any of the company-specific risk be diversified away by investing in both United Rentals and C PARAN 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 C PARAN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and C PARAN EN, you can compare the effects of market volatilities on United Rentals and C PARAN 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 C PARAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and C PARAN.
Diversification Opportunities for United Rentals and C PARAN
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and ELP1 is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and C PARAN EN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C PARAN EN 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 C PARAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C PARAN EN has no effect on the direction of United Rentals i.e., United Rentals and C PARAN go up and down completely randomly.
Pair Corralation between United Rentals and C PARAN
Assuming the 90 days horizon United Rentals is expected to under-perform the C PARAN. But the stock apears to be less risky and, when comparing its historical volatility, United Rentals is 1.35 times less risky than C PARAN. The stock trades about -0.23 of its potential returns per unit of risk. The C PARAN EN is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 580.00 in C PARAN EN on September 12, 2024 and sell it today you would lose (10.00) from holding C PARAN EN or give up 1.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Rentals vs. C PARAN EN
Performance |
| Timeline |
| United Rentals |
| C PARAN EN |
United Rentals and C PARAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and C PARAN
The main advantage of trading using opposite United Rentals and C PARAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, C PARAN 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 C PARAN will offset losses from the drop in C PARAN's long position.| United Rentals vs. WillScot Mobile Mini | United Rentals vs. Superior Plus Corp | United Rentals vs. SIVERS SEMICONDUCTORS AB | United Rentals vs. Norsk Hydro ASA |
| C PARAN vs. USWE SPORTS AB | C PARAN vs. United Rentals | C PARAN vs. AUTO TRADER ADR | C PARAN vs. Ming Le Sports |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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