Correlation Between Trailblazer Merger and United Rentals
Can any of the company-specific risk be diversified away by investing in both Trailblazer Merger 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 Trailblazer Merger and United Rentals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trailblazer Merger and United Rentals, you can compare the effects of market volatilities on Trailblazer Merger 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 Trailblazer Merger with a short position of United Rentals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trailblazer Merger and United Rentals.
Diversification Opportunities for Trailblazer Merger and United Rentals
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Trailblazer and United is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Trailblazer Merger and United Rentals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Rentals and Trailblazer Merger 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 Trailblazer Merger 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 Trailblazer Merger i.e., Trailblazer Merger and United Rentals go up and down completely randomly.
Pair Corralation between Trailblazer Merger and United Rentals
Assuming the 90 days horizon Trailblazer Merger is expected to generate 12.81 times more return on investment than United Rentals. However, Trailblazer Merger is 12.81 times more volatile than United Rentals. It trades about 0.15 of its potential returns per unit of risk. United Rentals is currently generating about -0.06 per unit of risk. If you would invest 16.00 in Trailblazer Merger on September 13, 2024 and sell it today you would earn a total of 6.91 from holding Trailblazer Merger or generate 43.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trailblazer Merger vs. United Rentals
Performance |
| Timeline |
| Trailblazer Merger |
| United Rentals |
Trailblazer Merger and United Rentals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trailblazer Merger and United Rentals
The main advantage of trading using opposite Trailblazer Merger and United Rentals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trailblazer Merger 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.| Trailblazer Merger vs. Visa Class A | Trailblazer Merger vs. Diamond Hill Investment | Trailblazer Merger vs. Distoken Acquisition | Trailblazer Merger vs. AllianceBernstein Holding LP |
| 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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