Correlation Between PT Wintermar and United Rentals
Can any of the company-specific risk be diversified away by investing in both PT Wintermar and United Rentals 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 PT Wintermar and United Rentals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Wintermar Offshore and United Rentals, you can compare the effects of market volatilities on PT Wintermar and United Rentals 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 PT Wintermar with a short position of United Rentals. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Wintermar and United Rentals.
Diversification Opportunities for PT Wintermar and United Rentals
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between W6O and United is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding PT Wintermar Offshore and United Rentals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Rentals and PT Wintermar 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 PT Wintermar Offshore are associated (or correlated) with United Rentals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Rentals has no effect on the direction of PT Wintermar i.e., PT Wintermar and United Rentals go up and down completely randomly.
Pair Corralation between PT Wintermar and United Rentals
Assuming the 90 days horizon PT Wintermar Offshore is expected to generate 4.63 times more return on investment than United Rentals. However, PT Wintermar is 4.63 times more volatile than United Rentals. It trades about 0.06 of its potential returns per unit of risk. United Rentals is currently generating about 0.05 per unit of risk. If you would invest 1.75 in PT Wintermar Offshore on November 4, 2024 and sell it today you would earn a total of 0.35 from holding PT Wintermar Offshore or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Wintermar Offshore vs. United Rentals
Performance |
| Timeline |
| PT Wintermar Offshore |
| United Rentals |
PT Wintermar and United Rentals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Wintermar and United Rentals
The main advantage of trading using opposite PT Wintermar and United Rentals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Wintermar position performs unexpectedly, United Rentals 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 United Rentals will offset losses from the drop in United Rentals' long position.| PT Wintermar vs. AP Mller | PT Wintermar vs. AP Mller | PT Wintermar vs. HAPAG LLOYD UNSPADR 12 | PT Wintermar vs. ZIM Integrated Shipping |
| United Rentals vs. OPKO HEALTH | United Rentals vs. Sims Metal Management | United Rentals vs. Tencent Music Entertainment | United Rentals vs. Molina Healthcare |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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