Correlation Between United Rentals and Sif Holding
Can any of the company-specific risk be diversified away by investing in both United Rentals and Sif Holding 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 Sif Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Sif Holding NV, you can compare the effects of market volatilities on United Rentals and Sif Holding 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 Sif Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Sif Holding.
Diversification Opportunities for United Rentals and Sif Holding
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between United and Sif is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Sif Holding NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sif Holding NV 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 Sif Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sif Holding NV has no effect on the direction of United Rentals i.e., United Rentals and Sif Holding go up and down completely randomly.
Pair Corralation between United Rentals and Sif Holding
Considering the 90-day investment horizon United Rentals is expected to generate 1.19 times more return on investment than Sif Holding. However, United Rentals is 1.19 times more volatile than Sif Holding NV. It trades about 0.08 of its potential returns per unit of risk. Sif Holding NV is currently generating about 0.02 per unit of risk. If you would invest 34,287 in United Rentals on September 12, 2024 and sell it today you would earn a total of 45,315 from holding United Rentals or generate 132.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.02% |
| Values | Daily Returns |
United Rentals vs. Sif Holding NV
Performance |
| Timeline |
| United Rentals |
| Sif Holding NV |
United Rentals and Sif Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Sif Holding
The main advantage of trading using opposite United Rentals and Sif Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Sif Holding 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 Sif Holding will offset losses from the drop in Sif Holding'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 |
| Sif Holding vs. Kendrion NV | Sif Holding vs. NV Nederlandsche Apparatenfabriek | Sif Holding vs. Brunel International NV | Sif Holding vs. TKH Group NV |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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