Correlation Between United Rentals and HUA YU
Can any of the company-specific risk be diversified away by investing in both United Rentals and HUA YU 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 HUA YU into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and HUA YU LIEN, you can compare the effects of market volatilities on United Rentals and HUA YU 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 HUA YU. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and HUA YU.
Diversification Opportunities for United Rentals and HUA YU
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and HUA is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and HUA YU LIEN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUA YU LIEN 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 HUA YU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUA YU LIEN has no effect on the direction of United Rentals i.e., United Rentals and HUA YU go up and down completely randomly.
Pair Corralation between United Rentals and HUA YU
Considering the 90-day investment horizon United Rentals is expected to under-perform the HUA YU. But the stock apears to be less risky and, when comparing its historical volatility, United Rentals is 1.17 times less risky than HUA YU. The stock trades about -0.06 of its potential returns per unit of risk. The HUA YU LIEN is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 11,800 in HUA YU LIEN on September 9, 2024 and sell it today you would earn a total of 650.00 from holding HUA YU LIEN or generate 5.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
United Rentals vs. HUA YU LIEN
Performance |
| Timeline |
| United Rentals |
| HUA YU LIEN |
United Rentals and HUA YU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and HUA YU
The main advantage of trading using opposite United Rentals and HUA YU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, HUA YU 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 HUA YU will offset losses from the drop in HUA YU's long position.| United Rentals vs. McGrath RentCorp | United Rentals vs. Herc Holdings | United Rentals vs. PROG Holdings | United Rentals vs. Ryder System |
| HUA YU vs. Advancetek Enterprise Co | HUA YU vs. GTM Holdings Corp | HUA YU vs. De Licacy Industrial | HUA YU vs. Shinkong Textile Co |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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