Correlation Between United Rentals and Alstria Office
Can any of the company-specific risk be diversified away by investing in both United Rentals and Alstria Office 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 Alstria Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and alstria office REIT AG, you can compare the effects of market volatilities on United Rentals and Alstria Office 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 Alstria Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Alstria Office.
Diversification Opportunities for United Rentals and Alstria Office
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Alstria is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and alstria office REIT AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on alstria office REIT 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 Alstria Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of alstria office REIT has no effect on the direction of United Rentals i.e., United Rentals and Alstria Office go up and down completely randomly.
Pair Corralation between United Rentals and Alstria Office
Assuming the 90 days horizon United Rentals is expected to under-perform the Alstria Office. But the stock apears to be less risky and, when comparing its historical volatility, United Rentals is 1.07 times less risky than Alstria Office. The stock trades about -0.31 of its potential returns per unit of risk. The alstria office REIT AG is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 710.00 in alstria office REIT AG on September 22, 2024 and sell it today you would earn a total of 50.00 from holding alstria office REIT AG or generate 7.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Rentals vs. alstria office REIT AG
Performance |
| Timeline |
| United Rentals |
| alstria office REIT |
United Rentals and Alstria Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Alstria Office
The main advantage of trading using opposite United Rentals and Alstria Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Alstria Office 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 Alstria Office will offset losses from the drop in Alstria Office's long position.| United Rentals vs. Ashtead Group plc | United Rentals vs. WillScot Mobile Mini | United Rentals vs. Avis Budget Group | United Rentals vs. ALD SA |
| Alstria Office vs. Cogent Communications Holdings | Alstria Office vs. Iridium Communications | Alstria Office vs. ALBIS LEASING AG | Alstria Office vs. United Rentals |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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