Correlation Between United Rentals and GX AI
Can any of the company-specific risk be diversified away by investing in both United Rentals and GX AI 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 GX AI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and GX AI TECH, you can compare the effects of market volatilities on United Rentals and GX AI 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 GX AI. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and GX AI.
Diversification Opportunities for United Rentals and GX AI
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and BAIQ39 is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and GX AI TECH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GX AI TECH 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 GX AI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GX AI TECH has no effect on the direction of United Rentals i.e., United Rentals and GX AI go up and down completely randomly.
Pair Corralation between United Rentals and GX AI
Assuming the 90 days trading horizon United Rentals is expected to under-perform the GX AI. In addition to that, United Rentals is 1.69 times more volatile than GX AI TECH. It trades about -0.08 of its total potential returns per unit of risk. GX AI TECH is currently generating about 0.49 per unit of volatility. If you would invest 7,343 in GX AI TECH on September 20, 2024 and sell it today you would earn a total of 825.00 from holding GX AI TECH or generate 11.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
United Rentals vs. GX AI TECH
Performance |
| Timeline |
| United Rentals |
| GX AI TECH |
United Rentals and GX AI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and GX AI
The main advantage of trading using opposite United Rentals and GX AI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, GX AI 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 GX AI will offset losses from the drop in GX AI'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 |
| GX AI vs. NXP Semiconductors NV | GX AI vs. Palantir Technologies | GX AI vs. United Rentals | GX AI vs. Spotify Technology SA |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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