Correlation Between United Rentals and Mizrahi Tefahot
Can any of the company-specific risk be diversified away by investing in both United Rentals and Mizrahi Tefahot 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 Mizrahi Tefahot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Mizrahi Tefahot, you can compare the effects of market volatilities on United Rentals and Mizrahi Tefahot 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 Mizrahi Tefahot. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Mizrahi Tefahot.
Diversification Opportunities for United Rentals and Mizrahi Tefahot
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between United and Mizrahi is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Mizrahi Tefahot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mizrahi Tefahot 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 Mizrahi Tefahot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mizrahi Tefahot has no effect on the direction of United Rentals i.e., United Rentals and Mizrahi Tefahot go up and down completely randomly.
Pair Corralation between United Rentals and Mizrahi Tefahot
Considering the 90-day investment horizon United Rentals is expected to generate 1.02 times more return on investment than Mizrahi Tefahot. However, United Rentals is 1.02 times more volatile than Mizrahi Tefahot. It trades about 0.1 of its potential returns per unit of risk. Mizrahi Tefahot is currently generating about 0.01 per unit of risk. If you would invest 44,212 in United Rentals on January 24, 2024 and sell it today you would earn a total of 18,718 from holding United Rentals or generate 42.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 81.08% |
| Values | Daily Returns |
United Rentals vs. Mizrahi Tefahot
Performance |
| Timeline |
| United Rentals |
| Mizrahi Tefahot |
United Rentals and Mizrahi Tefahot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Mizrahi Tefahot
The main advantage of trading using opposite United Rentals and Mizrahi Tefahot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Mizrahi Tefahot 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 Mizrahi Tefahot will offset losses from the drop in Mizrahi Tefahot's long position.| United Rentals vs. The Aarons | United Rentals vs. McGrath RentCorp | United Rentals vs. PROG Holdings | United Rentals vs. Ryder System |
| Mizrahi Tefahot vs. Bank Leumi Le Israel | Mizrahi Tefahot vs. Bank Hapoalim | Mizrahi Tefahot vs. Israel Discount Bank | Mizrahi Tefahot vs. First International Bank |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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