Correlation Between United Rentals and Inter Parfums
Can any of the company-specific risk be diversified away by investing in both United Rentals and Inter Parfums 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 Inter Parfums into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Inter Parfums, you can compare the effects of market volatilities on United Rentals and Inter Parfums 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 Inter Parfums. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Inter Parfums.
Diversification Opportunities for United Rentals and Inter Parfums
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Inter is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Inter Parfums in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inter Parfums 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 Inter Parfums. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inter Parfums has no effect on the direction of United Rentals i.e., United Rentals and Inter Parfums go up and down completely randomly.
Pair Corralation between United Rentals and Inter Parfums
Considering the 90-day investment horizon United Rentals is expected to generate 1.06 times more return on investment than Inter Parfums. However, United Rentals is 1.06 times more volatile than Inter Parfums. It trades about 0.11 of its potential returns per unit of risk. Inter Parfums is currently generating about 0.02 per unit of risk. If you would invest 38,363 in United Rentals on August 31, 2024 and sell it today you would earn a total of 48,237 from holding United Rentals or generate 125.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Rentals vs. Inter Parfums
Performance |
| Timeline |
| United Rentals |
| Inter Parfums |
United Rentals and Inter Parfums Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Inter Parfums
The main advantage of trading using opposite United Rentals and Inter Parfums positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Inter Parfums 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 Inter Parfums will offset losses from the drop in Inter Parfums' long position.| United Rentals vs. HE Equipment Services | United Rentals vs. GATX Corporation | United Rentals vs. McGrath RentCorp | United Rentals vs. Alta Equipment Group |
| Inter Parfums vs. Aquagold International | Inter Parfums vs. Morningstar Unconstrained Allocation | Inter Parfums vs. Thrivent High Yield | Inter Parfums vs. Via Renewables |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |