Correlation Between United Rentals and KIMBALL ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both United Rentals and KIMBALL ELECTRONICS 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 KIMBALL ELECTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and KIMBALL ELECTRONICS, you can compare the effects of market volatilities on United Rentals and KIMBALL ELECTRONICS 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 KIMBALL ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and KIMBALL ELECTRONICS.
Diversification Opportunities for United Rentals and KIMBALL ELECTRONICS
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between United and KIMBALL is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and KIMBALL ELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIMBALL ELECTRONICS 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 KIMBALL ELECTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KIMBALL ELECTRONICS has no effect on the direction of United Rentals i.e., United Rentals and KIMBALL ELECTRONICS go up and down completely randomly.
Pair Corralation between United Rentals and KIMBALL ELECTRONICS
Assuming the 90 days horizon United Rentals is expected to generate 1.66 times more return on investment than KIMBALL ELECTRONICS. However, United Rentals is 1.66 times more volatile than KIMBALL ELECTRONICS. It trades about 0.31 of its potential returns per unit of risk. KIMBALL ELECTRONICS is currently generating about 0.03 per unit of risk. If you would invest 68,120 in United Rentals on October 25, 2024 and sell it today you would earn a total of 7,420 from holding United Rentals or generate 10.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
United Rentals vs. KIMBALL ELECTRONICS
Performance |
Timeline |
United Rentals |
KIMBALL ELECTRONICS |
United Rentals and KIMBALL ELECTRONICS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with United Rentals and KIMBALL ELECTRONICS
The main advantage of trading using opposite United Rentals and KIMBALL ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, KIMBALL ELECTRONICS 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 KIMBALL ELECTRONICS will offset losses from the drop in KIMBALL ELECTRONICS's long position.United Rentals vs. Information Services International Dentsu | United Rentals vs. BURLINGTON STORES | United Rentals vs. Stewart Information Services | United Rentals vs. SPARTAN STORES |
KIMBALL ELECTRONICS vs. NEWELL RUBBERMAID | KIMBALL ELECTRONICS vs. FARM 51 GROUP | KIMBALL ELECTRONICS vs. Tokyu Construction Co | KIMBALL ELECTRONICS vs. Granite Construction |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |