Correlation Between United Rentals and FOSTOURGRP
Can any of the company-specific risk be diversified away by investing in both United Rentals and FOSTOURGRP 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 FOSTOURGRP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and FOSTOURGRP EO 0001, you can compare the effects of market volatilities on United Rentals and FOSTOURGRP 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 FOSTOURGRP. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and FOSTOURGRP.
Diversification Opportunities for United Rentals and FOSTOURGRP
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and FOSTOURGRP is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and FOSTOURGRP EO 0001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FOSTOURGRP EO 0001 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 FOSTOURGRP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FOSTOURGRP EO 0001 has no effect on the direction of United Rentals i.e., United Rentals and FOSTOURGRP go up and down completely randomly.
Pair Corralation between United Rentals and FOSTOURGRP
Assuming the 90 days horizon United Rentals is expected to generate 2.62 times more return on investment than FOSTOURGRP. However, United Rentals is 2.62 times more volatile than FOSTOURGRP EO 0001. It trades about 0.2 of its potential returns per unit of risk. FOSTOURGRP EO 0001 is currently generating about 0.09 per unit of risk. If you would invest 70,320 in United Rentals on October 23, 2024 and sell it today you would earn a total of 5,220 from holding United Rentals or generate 7.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
United Rentals vs. FOSTOURGRP EO 0001
Performance |
| Timeline |
| United Rentals |
| FOSTOURGRP EO 0001 |
United Rentals and FOSTOURGRP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and FOSTOURGRP
The main advantage of trading using opposite United Rentals and FOSTOURGRP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, FOSTOURGRP 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 FOSTOURGRP will offset losses from the drop in FOSTOURGRP's long position.| United Rentals vs. China Communications Services | United Rentals vs. GMO Internet | United Rentals vs. NTT DATA | United Rentals vs. DATAGROUP SE |
| FOSTOURGRP vs. Tyson Foods | FOSTOURGRP vs. Air Lease | FOSTOURGRP vs. United Rentals | FOSTOURGRP vs. Cal Maine Foods |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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