Correlation Between United Rentals and LUNDIN MINING
Can any of the company-specific risk be diversified away by investing in both United Rentals and LUNDIN MINING 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 LUNDIN MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and LUNDIN MINING, you can compare the effects of market volatilities on United Rentals and LUNDIN MINING 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 LUNDIN MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and LUNDIN MINING.
Diversification Opportunities for United Rentals and LUNDIN MINING
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and LUNDIN is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and LUNDIN MINING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LUNDIN MINING 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 LUNDIN MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LUNDIN MINING has no effect on the direction of United Rentals i.e., United Rentals and LUNDIN MINING go up and down completely randomly.
Pair Corralation between United Rentals and LUNDIN MINING
Assuming the 90 days horizon United Rentals is expected to under-perform the LUNDIN MINING. But the stock apears to be less risky and, when comparing its historical volatility, United Rentals is 1.22 times less risky than LUNDIN MINING. The stock trades about -0.15 of its potential returns per unit of risk. The LUNDIN MINING is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 888.00 in LUNDIN MINING on September 14, 2024 and sell it today you would lose (17.00) from holding LUNDIN MINING or give up 1.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Rentals vs. LUNDIN MINING
Performance |
| Timeline |
| United Rentals |
| LUNDIN MINING |
United Rentals and LUNDIN MINING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and LUNDIN MINING
The main advantage of trading using opposite United Rentals and LUNDIN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, LUNDIN MINING 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 LUNDIN MINING will offset losses from the drop in LUNDIN MINING'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 |
| LUNDIN MINING vs. Coor Service Management | LUNDIN MINING vs. KAUFMAN ET BROAD | LUNDIN MINING vs. CeoTronics AG | LUNDIN MINING vs. Gaztransport Technigaz SA |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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