Correlation Between United Rentals and MIRAMAR HOTEL
Can any of the company-specific risk be diversified away by investing in both United Rentals and MIRAMAR HOTEL 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 MIRAMAR HOTEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and MIRAMAR HOTEL INV, you can compare the effects of market volatilities on United Rentals and MIRAMAR HOTEL 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 MIRAMAR HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and MIRAMAR HOTEL.
Diversification Opportunities for United Rentals and MIRAMAR HOTEL
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between United and MIRAMAR is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and MIRAMAR HOTEL INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MIRAMAR HOTEL INV 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 MIRAMAR HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MIRAMAR HOTEL INV has no effect on the direction of United Rentals i.e., United Rentals and MIRAMAR HOTEL go up and down completely randomly.
Pair Corralation between United Rentals and MIRAMAR HOTEL
Assuming the 90 days horizon United Rentals is expected to generate 5.86 times more return on investment than MIRAMAR HOTEL. However, United Rentals is 5.86 times more volatile than MIRAMAR HOTEL INV. It trades about 0.13 of its potential returns per unit of risk. MIRAMAR HOTEL INV is currently generating about 0.0 per unit of risk. If you would invest 75,010 in United Rentals on August 28, 2024 and sell it today you would earn a total of 6,790 from holding United Rentals or generate 9.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Rentals vs. MIRAMAR HOTEL INV
Performance |
| Timeline |
| United Rentals |
| MIRAMAR HOTEL INV |
United Rentals and MIRAMAR HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and MIRAMAR HOTEL
The main advantage of trading using opposite United Rentals and MIRAMAR HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, MIRAMAR HOTEL 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 MIRAMAR HOTEL will offset losses from the drop in MIRAMAR HOTEL's long position.| United Rentals vs. 24SEVENOFFICE GROUP AB | United Rentals vs. Corporate Office Properties | United Rentals vs. MTI WIRELESS EDGE | United Rentals vs. CITY OFFICE REIT |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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