Correlation Between United Rentals and NESTE OYJ
Can any of the company-specific risk be diversified away by investing in both United Rentals and NESTE OYJ 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 NESTE OYJ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and NESTE OYJ UNSPADR, you can compare the effects of market volatilities on United Rentals and NESTE OYJ 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 NESTE OYJ. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and NESTE OYJ.
Diversification Opportunities for United Rentals and NESTE OYJ
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and NESTE is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and NESTE OYJ UNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NESTE OYJ UNSPADR 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 NESTE OYJ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NESTE OYJ UNSPADR has no effect on the direction of United Rentals i.e., United Rentals and NESTE OYJ go up and down completely randomly.
Pair Corralation between United Rentals and NESTE OYJ
Assuming the 90 days horizon United Rentals is expected to generate 0.86 times more return on investment than NESTE OYJ. However, United Rentals is 1.17 times less risky than NESTE OYJ. It trades about 0.06 of its potential returns per unit of risk. NESTE OYJ UNSPADR is currently generating about -0.11 per unit of risk. If you would invest 51,826 in United Rentals on September 20, 2024 and sell it today you would earn a total of 20,014 from holding United Rentals or generate 38.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
United Rentals vs. NESTE OYJ UNSPADR
Performance |
| Timeline |
| United Rentals |
| NESTE OYJ UNSPADR |
United Rentals and NESTE OYJ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and NESTE OYJ
The main advantage of trading using opposite United Rentals and NESTE OYJ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, NESTE OYJ 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 NESTE OYJ will offset losses from the drop in NESTE OYJ's long position.| United Rentals vs. Superior Plus Corp | United Rentals vs. SIVERS SEMICONDUCTORS AB | United Rentals vs. Norsk Hydro ASA | United Rentals vs. Reliance Steel Aluminum |
| NESTE OYJ vs. UNITED RENTALS | NESTE OYJ vs. Japan Post Insurance | NESTE OYJ vs. United Rentals | NESTE OYJ vs. ULTRA CLEAN HLDGS |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Transaction History View history of all your transactions and understand their impact on performance |