Correlation Between United Rentals and Columbia Emerging
Can any of the company-specific risk be diversified away by investing in both United Rentals and Columbia Emerging 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 Columbia Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Columbia Emerging Markets, you can compare the effects of market volatilities on United Rentals and Columbia Emerging 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 Columbia Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Columbia Emerging.
Diversification Opportunities for United Rentals and Columbia Emerging
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and Columbia is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Columbia Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Emerging Markets 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 Columbia Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Emerging Markets has no effect on the direction of United Rentals i.e., United Rentals and Columbia Emerging go up and down completely randomly.
Pair Corralation between United Rentals and Columbia Emerging
Considering the 90-day investment horizon United Rentals is expected to under-perform the Columbia Emerging. In addition to that, United Rentals is 9.0 times more volatile than Columbia Emerging Markets. It trades about -0.05 of its total potential returns per unit of risk. Columbia Emerging Markets is currently generating about 0.12 per unit of volatility. If you would invest 937.00 in Columbia Emerging Markets on December 29, 2024 and sell it today you would earn a total of 18.00 from holding Columbia Emerging Markets or generate 1.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
United Rentals vs. Columbia Emerging Markets
Performance |
Timeline |
United Rentals |
Columbia Emerging Markets |
United Rentals and Columbia Emerging Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with United Rentals and Columbia Emerging
The main advantage of trading using opposite United Rentals and Columbia Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Columbia Emerging 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 Columbia Emerging will offset losses from the drop in Columbia Emerging'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 |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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