Correlation Between United Rentals and Bath Body
Can any of the company-specific risk be diversified away by investing in both United Rentals and Bath Body 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 United Rentals and Bath Body into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Bath Body Works, you can compare the effects of market volatilities on United Rentals and Bath Body 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 United Rentals with a short position of Bath Body. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Bath Body.
Diversification Opportunities for United Rentals and Bath Body
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Bath is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Bath Body Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bath Body Works and United Rentals 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 United Rentals are associated (or correlated) with Bath Body. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bath Body Works has no effect on the direction of United Rentals i.e., United Rentals and Bath Body go up and down completely randomly.
Pair Corralation between United Rentals and Bath Body
Assuming the 90 days trading horizon United Rentals is expected to generate 0.68 times more return on investment than Bath Body. However, United Rentals is 1.47 times less risky than Bath Body. It trades about 0.1 of its potential returns per unit of risk. Bath Body Works is currently generating about 0.02 per unit of risk. If you would invest 7,732 in United Rentals on September 12, 2024 and sell it today you would earn a total of 9,548 from holding United Rentals or generate 123.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 43.06% |
| Values | Daily Returns |
United Rentals vs. Bath Body Works
Performance |
| Timeline |
| United Rentals |
| Bath Body Works |
United Rentals and Bath Body Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Bath Body
The main advantage of trading using opposite United Rentals and Bath Body positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Bath Body 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 Bath Body will offset losses from the drop in Bath Body's long position.| United Rentals vs. Localiza Rent a | United Rentals vs. Movida Participaes SA | United Rentals vs. Fundo Investimento Imobiliario | United Rentals vs. LESTE FDO INV |
| Bath Body vs. Teladoc Health | Bath Body vs. United Rentals | Bath Body vs. Charter Communications | Bath Body vs. GP Investments |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |