Correlation Between United Rentals and Lizhan Environmental
Can any of the company-specific risk be diversified away by investing in both United Rentals and Lizhan Environmental 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 Lizhan Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Lizhan Environmental, you can compare the effects of market volatilities on United Rentals and Lizhan Environmental 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 Lizhan Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Lizhan Environmental.
Diversification Opportunities for United Rentals and Lizhan Environmental
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and Lizhan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Lizhan Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lizhan Environmental 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 Lizhan Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lizhan Environmental has no effect on the direction of United Rentals i.e., United Rentals and Lizhan Environmental go up and down completely randomly.
Pair Corralation between United Rentals and Lizhan Environmental
If you would invest 0.01 in Lizhan Environmental on December 2, 2024 and sell it today you would earn a total of 0.00 from holding Lizhan Environmental or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
United Rentals vs. Lizhan Environmental
Performance |
Timeline |
United Rentals |
Lizhan Environmental |
United Rentals and Lizhan Environmental Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with United Rentals and Lizhan Environmental
The main advantage of trading using opposite United Rentals and Lizhan Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Lizhan Environmental 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 Lizhan Environmental will offset losses from the drop in Lizhan Environmental'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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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