Correlation Between First Ship and United Rentals
Can any of the company-specific risk be diversified away by investing in both First Ship and United Rentals 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 First Ship and United Rentals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Ship Lease and United Rentals, you can compare the effects of market volatilities on First Ship and United Rentals 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 First Ship with a short position of United Rentals. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Ship and United Rentals.
Diversification Opportunities for First Ship and United Rentals
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and United is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Ship Lease and United Rentals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Rentals and First Ship 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 First Ship Lease are associated (or correlated) with United Rentals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Rentals has no effect on the direction of First Ship i.e., First Ship and United Rentals go up and down completely randomly.
Pair Corralation between First Ship and United Rentals
If you would invest 82,310 in United Rentals on August 29, 2024 and sell it today you would earn a total of 5,007 from holding United Rentals or generate 6.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Ship Lease vs. United Rentals
Performance |
| Timeline |
| First Ship Lease |
| United Rentals |
First Ship and United Rentals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Ship and United Rentals
The main advantage of trading using opposite First Ship and United Rentals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Ship position performs unexpectedly, United Rentals 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 United Rentals will offset losses from the drop in United Rentals' long position.| First Ship vs. Kinetik Holdings | First Ship vs. Century Aluminum | First Ship vs. ArcelorMittal SA ADR | First Ship vs. WEC Energy Group |
| United Rentals vs. PROG Holdings | United Rentals vs. McGrath RentCorp | United Rentals vs. Mega Matrix Corp | United Rentals vs. FTAI Aviation Ltd |
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 Stocks Directory module to find actively traded stocks across global markets.
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