Correlation Between United Rentals and Apple
Can any of the company-specific risk be diversified away by investing in both United Rentals and Apple 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 Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Apple Inc, you can compare the effects of market volatilities on United Rentals and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Apple.
Diversification Opportunities for United Rentals and Apple
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and Apple is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of United Rentals i.e., United Rentals and Apple go up and down completely randomly.
Pair Corralation between United Rentals and Apple
Assuming the 90 days horizon United Rentals is expected to generate 1.06 times more return on investment than Apple. However, United Rentals is 1.06 times more volatile than Apple Inc. It trades about 0.27 of its potential returns per unit of risk. Apple Inc is currently generating about -0.05 per unit of risk. If you would invest 67,020 in United Rentals on November 4, 2024 and sell it today you would earn a total of 8,260 from holding United Rentals or generate 12.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Rentals vs. Apple Inc
Performance |
| Timeline |
| United Rentals |
| Apple Inc |
United Rentals and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Apple
The main advantage of trading using opposite United Rentals and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| United Rentals vs. GungHo Online Entertainment | United Rentals vs. Citic Telecom International | United Rentals vs. UNITED UTILITIES GR | United Rentals vs. CITIC Telecom International |
| Apple vs. Constellation Software | Apple vs. MAVEN WIRELESS SWEDEN | Apple vs. VIRGIN WINES UK | Apple vs. ITALIAN WINE BRANDS |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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