Correlation Between United Rentals and HYBE
Can any of the company-specific risk be diversified away by investing in both United Rentals and HYBE 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 HYBE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and HYBE Co, you can compare the effects of market volatilities on United Rentals and HYBE 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 HYBE. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and HYBE.
Diversification Opportunities for United Rentals and HYBE
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and HYBE is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and HYBE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYBE 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 HYBE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYBE has no effect on the direction of United Rentals i.e., United Rentals and HYBE go up and down completely randomly.
Pair Corralation between United Rentals and HYBE
Considering the 90-day investment horizon United Rentals is expected to generate 0.87 times more return on investment than HYBE. However, United Rentals is 1.16 times less risky than HYBE. It trades about 0.09 of its potential returns per unit of risk. HYBE Co is currently generating about 0.03 per unit of risk. If you would invest 35,864 in United Rentals on September 3, 2024 and sell it today you would earn a total of 50,736 from holding United Rentals or generate 141.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.58% |
| Values | Daily Returns |
United Rentals vs. HYBE Co
Performance |
| Timeline |
| United Rentals |
| HYBE |
United Rentals and HYBE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and HYBE
The main advantage of trading using opposite United Rentals and HYBE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, HYBE 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 HYBE will offset losses from the drop in HYBE's long position.| United Rentals vs. Alta Equipment Group | United Rentals vs. McGrath RentCorp | United Rentals vs. Herc Holdings | United Rentals vs. HE Equipment Services |
| HYBE vs. Miwon Chemical | HYBE vs. Hyundai Industrial Co | HYBE vs. LG Chemicals | HYBE vs. Youl Chon 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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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