Correlation Between United Rentals and Singapore Reinsurance
Can any of the company-specific risk be diversified away by investing in both United Rentals and Singapore Reinsurance 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 Singapore Reinsurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Singapore Reinsurance, you can compare the effects of market volatilities on United Rentals and Singapore Reinsurance 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 Singapore Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Singapore Reinsurance.
Diversification Opportunities for United Rentals and Singapore Reinsurance
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between United and Singapore is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Singapore Reinsurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Reinsurance 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 Singapore Reinsurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Reinsurance has no effect on the direction of United Rentals i.e., United Rentals and Singapore Reinsurance go up and down completely randomly.
Pair Corralation between United Rentals and Singapore Reinsurance
Assuming the 90 days horizon United Rentals is expected to generate 1.6 times less return on investment than Singapore Reinsurance. In addition to that, United Rentals is 1.13 times more volatile than Singapore Reinsurance. It trades about 0.06 of its total potential returns per unit of risk. Singapore Reinsurance is currently generating about 0.1 per unit of volatility. If you would invest 2,820 in Singapore Reinsurance on November 7, 2024 and sell it today you would earn a total of 740.00 from holding Singapore Reinsurance or generate 26.24% 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. Singapore Reinsurance
Performance |
| Timeline |
| United Rentals |
| Singapore Reinsurance |
United Rentals and Singapore Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Singapore Reinsurance
The main advantage of trading using opposite United Rentals and Singapore Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Singapore Reinsurance 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 Singapore Reinsurance will offset losses from the drop in Singapore Reinsurance'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 |
| Singapore Reinsurance vs. American Public Education | Singapore Reinsurance vs. Laureate Education | Singapore Reinsurance vs. DEVRY EDUCATION GRP | Singapore Reinsurance vs. RYU Apparel |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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