Correlation Between United Rentals and NKSJ HOLDINGS
Can any of the company-specific risk be diversified away by investing in both United Rentals and NKSJ HOLDINGS 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 NKSJ HOLDINGS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and NKSJ HOLDINGS, you can compare the effects of market volatilities on United Rentals and NKSJ HOLDINGS 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 NKSJ HOLDINGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and NKSJ HOLDINGS.
Diversification Opportunities for United Rentals and NKSJ HOLDINGS
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between United and NKSJ is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and NKSJ HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NKSJ HOLDINGS 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 NKSJ HOLDINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NKSJ HOLDINGS has no effect on the direction of United Rentals i.e., United Rentals and NKSJ HOLDINGS go up and down completely randomly.
Pair Corralation between United Rentals and NKSJ HOLDINGS
Considering the 90-day investment horizon United Rentals is expected to generate 2.93 times less return on investment than NKSJ HOLDINGS. But when comparing it to its historical volatility, United Rentals is 1.4 times less risky than NKSJ HOLDINGS. It trades about 0.17 of its potential returns per unit of risk. NKSJ HOLDINGS is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 1,980 in NKSJ HOLDINGS on September 4, 2024 and sell it today you would earn a total of 600.00 from holding NKSJ HOLDINGS or generate 30.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Rentals vs. NKSJ HOLDINGS
Performance |
| Timeline |
| United Rentals |
| NKSJ HOLDINGS |
United Rentals and NKSJ HOLDINGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and NKSJ HOLDINGS
The main advantage of trading using opposite United Rentals and NKSJ HOLDINGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, NKSJ HOLDINGS 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 NKSJ HOLDINGS will offset losses from the drop in NKSJ HOLDINGS'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 |
| NKSJ HOLDINGS vs. ANGLER GAMING PLC | NKSJ HOLDINGS vs. Media and Games | NKSJ HOLDINGS vs. Computershare Limited | NKSJ HOLDINGS vs. GAMESTOP |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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