Correlation Between United Rentals and YASKAWA ELEC
Can any of the company-specific risk be diversified away by investing in both United Rentals and YASKAWA ELEC 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 YASKAWA ELEC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and YASKAWA ELEC UNSP, you can compare the effects of market volatilities on United Rentals and YASKAWA ELEC 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 YASKAWA ELEC. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and YASKAWA ELEC.
Diversification Opportunities for United Rentals and YASKAWA ELEC
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between United and YASKAWA is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and YASKAWA ELEC UNSP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YASKAWA ELEC UNSP 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 YASKAWA ELEC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YASKAWA ELEC UNSP has no effect on the direction of United Rentals i.e., United Rentals and YASKAWA ELEC go up and down completely randomly.
Pair Corralation between United Rentals and YASKAWA ELEC
Assuming the 90 days horizon United Rentals is expected to generate 1.6 times less return on investment than YASKAWA ELEC. But when comparing it to its historical volatility, United Rentals is 1.19 times less risky than YASKAWA ELEC. It trades about 0.31 of its potential returns per unit of risk. YASKAWA ELEC UNSP is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 4,660 in YASKAWA ELEC UNSP on October 25, 2024 and sell it today you would earn a total of 840.00 from holding YASKAWA ELEC UNSP or generate 18.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Rentals vs. YASKAWA ELEC UNSP
Performance |
| Timeline |
| United Rentals |
| YASKAWA ELEC UNSP |
United Rentals and YASKAWA ELEC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and YASKAWA ELEC
The main advantage of trading using opposite United Rentals and YASKAWA ELEC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, YASKAWA ELEC 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 YASKAWA ELEC will offset losses from the drop in YASKAWA ELEC's long position.| United Rentals vs. Information Services International Dentsu | United Rentals vs. BURLINGTON STORES | United Rentals vs. Stewart Information Services | United Rentals vs. SPARTAN STORES |
| YASKAWA ELEC vs. Siamgas And Petrochemicals | YASKAWA ELEC vs. TRI CHEMICAL LABORATINC | YASKAWA ELEC vs. International Consolidated Airlines | YASKAWA ELEC vs. PTT Global Chemical |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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