Correlation Between United Rentals and Caseys General
Can any of the company-specific risk be diversified away by investing in both United Rentals and Caseys General 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 Caseys General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Caseys General Stores, you can compare the effects of market volatilities on United Rentals and Caseys General 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 Caseys General. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Caseys General.
Diversification Opportunities for United Rentals and Caseys General
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between United and Caseys is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Caseys General Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caseys General Stores 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 Caseys General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caseys General Stores has no effect on the direction of United Rentals i.e., United Rentals and Caseys General go up and down completely randomly.
Pair Corralation between United Rentals and Caseys General
Assuming the 90 days horizon United Rentals is expected to generate 1.71 times more return on investment than Caseys General. However, United Rentals is 1.71 times more volatile than Caseys General Stores. It trades about 0.13 of its potential returns per unit of risk. Caseys General Stores is currently generating about 0.18 per unit of risk. If you would invest 75,848 in United Rentals on August 30, 2024 and sell it today you would earn a total of 7,452 from holding United Rentals or generate 9.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Rentals vs. Caseys General Stores
Performance |
| Timeline |
| United Rentals |
| Caseys General Stores |
United Rentals and Caseys General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Caseys General
The main advantage of trading using opposite United Rentals and Caseys General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Caseys General 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 Caseys General will offset losses from the drop in Caseys General's long position.| United Rentals vs. Microchip Technology Incorporated | United Rentals vs. SCIENCE IN SPORT | United Rentals vs. SMA Solar Technology | United Rentals vs. COLUMBIA SPORTSWEAR |
| Caseys General vs. Apple Inc | Caseys General vs. Apple Inc | Caseys General vs. Apple Inc | Caseys General vs. Apple Inc |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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