Correlation Between United Rentals and Nighthawk Gold
Can any of the company-specific risk be diversified away by investing in both United Rentals and Nighthawk Gold 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 Nighthawk Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Nighthawk Gold Corp, you can compare the effects of market volatilities on United Rentals and Nighthawk Gold 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 Nighthawk Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Nighthawk Gold.
Diversification Opportunities for United Rentals and Nighthawk Gold
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between United and Nighthawk is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Nighthawk Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nighthawk Gold Corp 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 Nighthawk Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nighthawk Gold Corp has no effect on the direction of United Rentals i.e., United Rentals and Nighthawk Gold go up and down completely randomly.
Pair Corralation between United Rentals and Nighthawk Gold
Considering the 90-day investment horizon United Rentals is expected to generate 3.22 times less return on investment than Nighthawk Gold. But when comparing it to its historical volatility, United Rentals is 2.33 times less risky than Nighthawk Gold. It trades about 0.09 of its potential returns per unit of risk. Nighthawk Gold Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 27.00 in Nighthawk Gold Corp on September 6, 2024 and sell it today you would earn a total of 14.00 from holding Nighthawk Gold Corp or generate 51.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 15.59% |
Values | Daily Returns |
United Rentals vs. Nighthawk Gold Corp
Performance |
Timeline |
United Rentals |
Nighthawk Gold Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
United Rentals and Nighthawk Gold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with United Rentals and Nighthawk Gold
The main advantage of trading using opposite United Rentals and Nighthawk Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Nighthawk Gold 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 Nighthawk Gold will offset losses from the drop in Nighthawk Gold'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 |
Nighthawk Gold vs. Endurance Gold | Nighthawk Gold vs. Red Pine Exploration | Nighthawk Gold vs. Puma Exploration | Nighthawk Gold vs. White Gold Corp |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
Fundamental Analysis View fundamental data based on most recent published financial statements | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |