Correlation Between Franklin Street and United Rentals
Can any of the company-specific risk be diversified away by investing in both Franklin Street 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 Franklin Street and United Rentals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Street Properties and United Rentals, you can compare the effects of market volatilities on Franklin Street 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 Franklin Street with a short position of United Rentals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Street and United Rentals.
Diversification Opportunities for Franklin Street and United Rentals
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and United is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Street Properties and United Rentals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Rentals and Franklin Street 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 Franklin Street Properties 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 Franklin Street i.e., Franklin Street and United Rentals go up and down completely randomly.
Pair Corralation between Franklin Street and United Rentals
Considering the 90-day investment horizon Franklin Street Properties is expected to generate 1.29 times more return on investment than United Rentals. However, Franklin Street is 1.29 times more volatile than United Rentals. It trades about 0.12 of its potential returns per unit of risk. United Rentals is currently generating about -0.39 per unit of risk. If you would invest 184.00 in Franklin Street Properties on November 29, 2024 and sell it today you would earn a total of 11.00 from holding Franklin Street Properties or generate 5.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Street Properties vs. United Rentals
Performance |
| Timeline |
| Franklin Street Prop |
| United Rentals |
Franklin Street and United Rentals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Street and United Rentals
The main advantage of trading using opposite Franklin Street and United Rentals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Street 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.| Franklin Street vs. Cousins Properties Incorporated | Franklin Street vs. Creative Media Community | Franklin Street vs. Highwoods Properties | Franklin Street vs. Douglas Emmett |
| United Rentals vs. HE Equipment Services | United Rentals vs. GATX Corporation | United Rentals vs. McGrath RentCorp | United Rentals vs. Alta Equipment Group |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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