Correlation Between United Rentals and Regeneron Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both United Rentals and Regeneron Pharmaceuticals 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 Regeneron Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Regeneron Pharmaceuticals, you can compare the effects of market volatilities on United Rentals and Regeneron Pharmaceuticals 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 Regeneron Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Regeneron Pharmaceuticals.
Diversification Opportunities for United Rentals and Regeneron Pharmaceuticals
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Regeneron is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Regeneron Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regeneron Pharmaceuticals 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 Regeneron Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regeneron Pharmaceuticals has no effect on the direction of United Rentals i.e., United Rentals and Regeneron Pharmaceuticals go up and down completely randomly.
Pair Corralation between United Rentals and Regeneron Pharmaceuticals
Considering the 90-day investment horizon United Rentals is expected to generate 1.04 times more return on investment than Regeneron Pharmaceuticals. However, United Rentals is 1.04 times more volatile than Regeneron Pharmaceuticals. It trades about 0.2 of its potential returns per unit of risk. Regeneron Pharmaceuticals is currently generating about -0.13 per unit of risk. If you would invest 71,960 in United Rentals on October 22, 2024 and sell it today you would earn a total of 5,140 from holding United Rentals or generate 7.14% 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. Regeneron Pharmaceuticals
Performance |
| Timeline |
| United Rentals |
| Regeneron Pharmaceuticals |
United Rentals and Regeneron Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Regeneron Pharmaceuticals
The main advantage of trading using opposite United Rentals and Regeneron Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Regeneron Pharmaceuticals 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 Regeneron Pharmaceuticals will offset losses from the drop in Regeneron Pharmaceuticals' long position.| United Rentals vs. HE Equipment Services | United Rentals vs. GATX Corporation | United Rentals vs. McGrath RentCorp | United Rentals vs. Alta Equipment Group |
| Regeneron Pharmaceuticals vs. Crispr Therapeutics AG | Regeneron Pharmaceuticals vs. Novo Nordisk AS | Regeneron Pharmaceuticals vs. Sarepta Therapeutics | Regeneron Pharmaceuticals vs. Intellia Therapeutics |
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.
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