Correlation Between McGrath RentCorp and Aarons
Can any of the company-specific risk be diversified away by investing in both McGrath RentCorp and Aarons 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 McGrath RentCorp and Aarons into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McGrath RentCorp and The Aarons, you can compare the effects of market volatilities on McGrath RentCorp and Aarons 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 McGrath RentCorp with a short position of Aarons. Check out your portfolio center. Please also check ongoing floating volatility patterns of McGrath RentCorp and Aarons.
Diversification Opportunities for McGrath RentCorp and Aarons
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between McGrath and Aarons is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding McGrath RentCorp and The Aarons in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aarons and McGrath RentCorp 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 McGrath RentCorp are associated (or correlated) with Aarons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aarons has no effect on the direction of McGrath RentCorp i.e., McGrath RentCorp and Aarons go up and down completely randomly.
Pair Corralation between McGrath RentCorp and Aarons
If you would invest 10,987 in McGrath RentCorp on November 2, 2024 and sell it today you would earn a total of 1,444 from holding McGrath RentCorp or generate 13.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 5.26% |
| Values | Daily Returns |
McGrath RentCorp vs. The Aarons
Performance |
| Timeline |
| McGrath RentCorp |
| Aarons |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
McGrath RentCorp and Aarons Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McGrath RentCorp and Aarons
The main advantage of trading using opposite McGrath RentCorp and Aarons positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McGrath RentCorp position performs unexpectedly, Aarons 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 Aarons will offset losses from the drop in Aarons' long position.| McGrath RentCorp vs. Atos SE | McGrath RentCorp vs. Deveron Corp | McGrath RentCorp vs. Appen Limited | McGrath RentCorp vs. Atos Origin SA |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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