Correlation Between ATRESMEDIA and UNITED RENTALS
Can any of the company-specific risk be diversified away by investing in both ATRESMEDIA 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 ATRESMEDIA and UNITED RENTALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATRESMEDIA and UNITED RENTALS, you can compare the effects of market volatilities on ATRESMEDIA 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 ATRESMEDIA with a short position of UNITED RENTALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATRESMEDIA and UNITED RENTALS.
Diversification Opportunities for ATRESMEDIA and UNITED RENTALS
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ATRESMEDIA and UNITED is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding ATRESMEDIA and UNITED RENTALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITED RENTALS and ATRESMEDIA 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 ATRESMEDIA 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 ATRESMEDIA i.e., ATRESMEDIA and UNITED RENTALS go up and down completely randomly.
Pair Corralation between ATRESMEDIA and UNITED RENTALS
Assuming the 90 days trading horizon ATRESMEDIA is expected to generate 1.51 times less return on investment than UNITED RENTALS. But when comparing it to its historical volatility, ATRESMEDIA is 1.69 times less risky than UNITED RENTALS. It trades about 0.1 of its potential returns per unit of risk. UNITED RENTALS is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 32,051 in UNITED RENTALS on September 13, 2024 and sell it today you would earn a total of 43,109 from holding UNITED RENTALS or generate 134.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATRESMEDIA vs. UNITED RENTALS
Performance |
| Timeline |
| ATRESMEDIA |
| UNITED RENTALS |
ATRESMEDIA and UNITED RENTALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATRESMEDIA and UNITED RENTALS
The main advantage of trading using opposite ATRESMEDIA and UNITED RENTALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATRESMEDIA 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's long position.| ATRESMEDIA vs. QURATE RETAIL INC | ATRESMEDIA vs. CANON MARKETING JP | ATRESMEDIA vs. RETAIL FOOD GROUP | ATRESMEDIA vs. LPKF Laser Electronics |
| UNITED RENTALS vs. BURLINGTON STORES | UNITED RENTALS vs. Goodyear Tire Rubber | UNITED RENTALS vs. Retail Estates NV | UNITED RENTALS vs. GRUPO CARSO A1 |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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