Correlation Between United Rentals and NISSHA
Can any of the company-specific risk be diversified away by investing in both United Rentals and NISSHA 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 NISSHA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and NISSHA LTD, you can compare the effects of market volatilities on United Rentals and NISSHA 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 NISSHA. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and NISSHA.
Diversification Opportunities for United Rentals and NISSHA
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and NISSHA is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and NISSHA LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NISSHA LTD 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 NISSHA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NISSHA LTD has no effect on the direction of United Rentals i.e., United Rentals and NISSHA go up and down completely randomly.
Pair Corralation between United Rentals and NISSHA
Considering the 90-day investment horizon United Rentals is expected to generate 1.04 times more return on investment than NISSHA. However, United Rentals is 1.04 times more volatile than NISSHA LTD. It trades about 0.11 of its potential returns per unit of risk. NISSHA LTD is currently generating about 0.01 per unit of risk. If you would invest 38,457 in United Rentals on September 4, 2024 and sell it today you would earn a total of 47,248 from holding United Rentals or generate 122.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.9% |
| Values | Daily Returns |
United Rentals vs. NISSHA LTD
Performance |
| Timeline |
| United Rentals |
| NISSHA LTD |
United Rentals and NISSHA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and NISSHA
The main advantage of trading using opposite United Rentals and NISSHA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, NISSHA 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 NISSHA will offset losses from the drop in NISSHA'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 |
| NISSHA vs. Hon Hai Precision | NISSHA vs. Samsung SDI Co | NISSHA vs. Murata Manufacturing Co | NISSHA vs. Mitsubishi Electric |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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