Correlation Between United Rentals and FEMALE HEALTH
Can any of the company-specific risk be diversified away by investing in both United Rentals and FEMALE HEALTH 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 FEMALE HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and FEMALE HEALTH, you can compare the effects of market volatilities on United Rentals and FEMALE HEALTH 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 FEMALE HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and FEMALE HEALTH.
Diversification Opportunities for United Rentals and FEMALE HEALTH
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between United and FEMALE is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and FEMALE HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEMALE HEALTH 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 FEMALE HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEMALE HEALTH has no effect on the direction of United Rentals i.e., United Rentals and FEMALE HEALTH go up and down completely randomly.
Pair Corralation between United Rentals and FEMALE HEALTH
Assuming the 90 days horizon United Rentals is expected to generate 0.17 times more return on investment than FEMALE HEALTH. However, United Rentals is 6.0 times less risky than FEMALE HEALTH. It trades about 0.12 of its potential returns per unit of risk. FEMALE HEALTH is currently generating about 0.01 per unit of risk. If you would invest 67,060 in United Rentals on November 7, 2024 and sell it today you would earn a total of 3,980 from holding United Rentals or generate 5.93% 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. FEMALE HEALTH
Performance |
| Timeline |
| United Rentals |
| FEMALE HEALTH |
United Rentals and FEMALE HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and FEMALE HEALTH
The main advantage of trading using opposite United Rentals and FEMALE HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, FEMALE HEALTH 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 FEMALE HEALTH will offset losses from the drop in FEMALE HEALTH's long position.| United Rentals vs. SEI INVESTMENTS | United Rentals vs. Guangdong Investment Limited | United Rentals vs. PennantPark Investment | United Rentals vs. Cognizant Technology Solutions |
| FEMALE HEALTH vs. Apple Inc | FEMALE HEALTH vs. Apple Inc | FEMALE HEALTH vs. Apple Inc | FEMALE HEALTH vs. Apple Inc |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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