Correlation Between United Rentals and Radico Khaitan
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By analyzing existing cross correlation between United Rentals and Radico Khaitan Limited, you can compare the effects of market volatilities on United Rentals and Radico Khaitan 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 Radico Khaitan. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Radico Khaitan.
Diversification Opportunities for United Rentals and Radico Khaitan
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Radico is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Radico Khaitan Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radico Khaitan 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 Radico Khaitan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radico Khaitan has no effect on the direction of United Rentals i.e., United Rentals and Radico Khaitan go up and down completely randomly.
Pair Corralation between United Rentals and Radico Khaitan
Considering the 90-day investment horizon United Rentals is expected to generate 0.83 times more return on investment than Radico Khaitan. However, United Rentals is 1.2 times less risky than Radico Khaitan. It trades about 0.19 of its potential returns per unit of risk. Radico Khaitan Limited is currently generating about 0.13 per unit of risk. If you would invest 69,463 in United Rentals on September 8, 2024 and sell it today you would earn a total of 16,429 from holding United Rentals or generate 23.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 96.92% |
Values | Daily Returns |
United Rentals vs. Radico Khaitan Limited
Performance |
Timeline |
United Rentals |
Radico Khaitan |
United Rentals and Radico Khaitan Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with United Rentals and Radico Khaitan
The main advantage of trading using opposite United Rentals and Radico Khaitan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Radico Khaitan 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 Radico Khaitan will offset losses from the drop in Radico Khaitan'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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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