Correlation Between United Rentals and Promotora
Can any of the company-specific risk be diversified away by investing in both United Rentals and Promotora 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 Promotora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Promotora de Informaciones, you can compare the effects of market volatilities on United Rentals and Promotora 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 Promotora. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Promotora.
Diversification Opportunities for United Rentals and Promotora
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between United and Promotora is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Promotora de Informaciones in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Promotora de Informa 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 Promotora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Promotora de Informa has no effect on the direction of United Rentals i.e., United Rentals and Promotora go up and down completely randomly.
Pair Corralation between United Rentals and Promotora
Considering the 90-day investment horizon United Rentals is expected to generate 1.62 times more return on investment than Promotora. However, United Rentals is 1.62 times more volatile than Promotora de Informaciones. It trades about 0.17 of its potential returns per unit of risk. Promotora de Informaciones is currently generating about 0.01 per unit of risk. If you would invest 78,451 in United Rentals on September 4, 2024 and sell it today you would earn a total of 7,254 from holding United Rentals or generate 9.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Rentals vs. Promotora de Informaciones
Performance |
| Timeline |
| United Rentals |
| Promotora de Informa |
United Rentals and Promotora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Promotora
The main advantage of trading using opposite United Rentals and Promotora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Promotora 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 Promotora will offset losses from the drop in Promotora'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 |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |