Correlation Between United Rentals and Gigante Salmon
Can any of the company-specific risk be diversified away by investing in both United Rentals and Gigante Salmon 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 Gigante Salmon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Gigante Salmon AS, you can compare the effects of market volatilities on United Rentals and Gigante Salmon 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 Gigante Salmon. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Gigante Salmon.
Diversification Opportunities for United Rentals and Gigante Salmon
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Gigante is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Gigante Salmon AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gigante Salmon AS 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 Gigante Salmon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gigante Salmon AS has no effect on the direction of United Rentals i.e., United Rentals and Gigante Salmon go up and down completely randomly.
Pair Corralation between United Rentals and Gigante Salmon
Considering the 90-day investment horizon United Rentals is expected to generate 0.83 times more return on investment than Gigante Salmon. However, United Rentals is 1.21 times less risky than Gigante Salmon. It trades about 0.09 of its potential returns per unit of risk. Gigante Salmon AS is currently generating about 0.02 per unit of risk. If you would invest 34,927 in United Rentals on September 5, 2024 and sell it today you would earn a total of 51,975 from holding United Rentals or generate 148.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
United Rentals vs. Gigante Salmon AS
Performance |
| Timeline |
| United Rentals |
| Gigante Salmon AS |
United Rentals and Gigante Salmon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Gigante Salmon
The main advantage of trading using opposite United Rentals and Gigante Salmon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Gigante Salmon 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 Gigante Salmon will offset losses from the drop in Gigante Salmon'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 |
| Gigante Salmon vs. Andfjord Salmon AS | Gigante Salmon vs. Salmon Evolution Holding | Gigante Salmon vs. Biofish Holding AS | Gigante Salmon vs. Nordic Aqua Partners |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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