Correlation Between Minor International and United Rentals
Can any of the company-specific risk be diversified away by investing in both Minor International 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 Minor International and United Rentals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Minor International PCL and United Rentals, you can compare the effects of market volatilities on Minor International 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 Minor International with a short position of United Rentals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minor International and United Rentals.
Diversification Opportunities for Minor International and United Rentals
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Minor and United is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Minor International PCL and United Rentals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Rentals and Minor International 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 Minor International PCL 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 Minor International i.e., Minor International and United Rentals go up and down completely randomly.
Pair Corralation between Minor International and United Rentals
If you would invest 2,177 in Minor International PCL on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Minor International PCL or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Minor International PCL vs. United Rentals
Performance |
| Timeline |
| Minor International PCL |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| United Rentals |
Minor International and United Rentals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Minor International and United Rentals
The main advantage of trading using opposite Minor International and United Rentals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minor International 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.| Minor International vs. Alaska Air Group | Minor International vs. American Airlines Group | Minor International vs. Southwest Airlines | Minor International vs. Delta Air Lines |
| 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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