Correlation Between United Rentals and Yellow Pages
Can any of the company-specific risk be diversified away by investing in both United Rentals and Yellow Pages 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 Yellow Pages into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Yellow Pages Limited, you can compare the effects of market volatilities on United Rentals and Yellow Pages 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 Yellow Pages. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Yellow Pages.
Diversification Opportunities for United Rentals and Yellow Pages
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Yellow is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Yellow Pages Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yellow Pages Limited 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 Yellow Pages. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yellow Pages Limited has no effect on the direction of United Rentals i.e., United Rentals and Yellow Pages go up and down completely randomly.
Pair Corralation between United Rentals and Yellow Pages
Assuming the 90 days horizon United Rentals is expected to generate 1.13 times less return on investment than Yellow Pages. In addition to that, United Rentals is 1.81 times more volatile than Yellow Pages Limited. It trades about 0.16 of its total potential returns per unit of risk. Yellow Pages Limited is currently generating about 0.33 per unit of volatility. If you would invest 629.00 in Yellow Pages Limited on September 3, 2024 and sell it today you would earn a total of 91.00 from holding Yellow Pages Limited or generate 14.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Rentals vs. Yellow Pages Limited
Performance |
| Timeline |
| United Rentals |
| Yellow Pages Limited |
United Rentals and Yellow Pages Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Yellow Pages
The main advantage of trading using opposite United Rentals and Yellow Pages positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Yellow Pages 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 Yellow Pages will offset losses from the drop in Yellow Pages' long position.| United Rentals vs. Ashtead Group plc | United Rentals vs. WillScot Mobile Mini | United Rentals vs. Sixt SE |
| Yellow Pages vs. Pure Storage | Yellow Pages vs. TERADATA | Yellow Pages vs. Magnachip Semiconductor | Yellow Pages vs. Hyrican Informationssysteme Aktiengesellschaft |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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