Correlation Between United Rentals and LODESTAR MIN
Can any of the company-specific risk be diversified away by investing in both United Rentals and LODESTAR MIN 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 LODESTAR MIN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and LODESTAR MIN, you can compare the effects of market volatilities on United Rentals and LODESTAR MIN 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 LODESTAR MIN. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and LODESTAR MIN.
Diversification Opportunities for United Rentals and LODESTAR MIN
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and LODESTAR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and LODESTAR MIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LODESTAR MIN 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 LODESTAR MIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LODESTAR MIN has no effect on the direction of United Rentals i.e., United Rentals and LODESTAR MIN go up and down completely randomly.
Pair Corralation between United Rentals and LODESTAR MIN
Considering the 90-day investment horizon United Rentals is expected to generate 13.9 times less return on investment than LODESTAR MIN. But when comparing it to its historical volatility, United Rentals is 27.9 times less risky than LODESTAR MIN. It trades about 0.11 of its potential returns per unit of risk. LODESTAR MIN is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.69 in LODESTAR MIN on September 4, 2024 and sell it today you would lose (0.25) from holding LODESTAR MIN or give up 36.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
United Rentals vs. LODESTAR MIN
Performance |
| Timeline |
| United Rentals |
| LODESTAR MIN |
United Rentals and LODESTAR MIN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and LODESTAR MIN
The main advantage of trading using opposite United Rentals and LODESTAR MIN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, LODESTAR MIN 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 LODESTAR MIN will offset losses from the drop in LODESTAR MIN's long position.| United Rentals vs. HE Equipment Services | United Rentals vs. GATX Corporation | United Rentals vs. McGrath RentCorp | United Rentals vs. Alta Equipment Group |
| LODESTAR MIN vs. Lion Biotechnologies | LODESTAR MIN vs. Lifeway Foods | LODESTAR MIN vs. JJ SNACK FOODS | LODESTAR MIN vs. SCANSOURCE |
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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