Correlation Between United Rentals and Metaline Contact
Can any of the company-specific risk be diversified away by investing in both United Rentals and Metaline Contact 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 Metaline Contact into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Metaline Contact Mines, you can compare the effects of market volatilities on United Rentals and Metaline Contact 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 Metaline Contact. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Metaline Contact.
Diversification Opportunities for United Rentals and Metaline Contact
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between United and Metaline is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Metaline Contact Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metaline Contact Mines 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 Metaline Contact. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metaline Contact Mines has no effect on the direction of United Rentals i.e., United Rentals and Metaline Contact go up and down completely randomly.
Pair Corralation between United Rentals and Metaline Contact
Considering the 90-day investment horizon United Rentals is expected to generate 0.69 times more return on investment than Metaline Contact. However, United Rentals is 1.46 times less risky than Metaline Contact. It trades about 0.1 of its potential returns per unit of risk. Metaline Contact Mines is currently generating about -0.17 per unit of risk. If you would invest 71,129 in United Rentals on September 12, 2024 and sell it today you would earn a total of 8,473 from holding United Rentals or generate 11.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Rentals vs. Metaline Contact Mines
Performance |
| Timeline |
| United Rentals |
| Metaline Contact Mines |
United Rentals and Metaline Contact Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Metaline Contact
The main advantage of trading using opposite United Rentals and Metaline Contact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Metaline Contact 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 Metaline Contact will offset losses from the drop in Metaline Contact'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 |
| Metaline Contact vs. Azure Holding Group | Metaline Contact vs. Snoogoo Corp | Metaline Contact vs. Opus Magnum Ameris | Metaline Contact vs. Israel Acquisitions Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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