Correlation Between United Rentals and DICKS Sporting
Can any of the company-specific risk be diversified away by investing in both United Rentals and DICKS Sporting 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 DICKS Sporting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and DICKS Sporting Goods, you can compare the effects of market volatilities on United Rentals and DICKS Sporting 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 DICKS Sporting. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and DICKS Sporting.
Diversification Opportunities for United Rentals and DICKS Sporting
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and DICKS is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and DICKS Sporting Goods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DICKS Sporting Goods 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 DICKS Sporting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DICKS Sporting Goods has no effect on the direction of United Rentals i.e., United Rentals and DICKS Sporting go up and down completely randomly.
Pair Corralation between United Rentals and DICKS Sporting
Assuming the 90 days horizon United Rentals is expected to under-perform the DICKS Sporting. But the stock apears to be less risky and, when comparing its historical volatility, United Rentals is 1.78 times less risky than DICKS Sporting. The stock trades about -0.23 of its potential returns per unit of risk. The DICKS Sporting Goods is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 18,742 in DICKS Sporting Goods on September 12, 2024 and sell it today you would earn a total of 1,613 from holding DICKS Sporting Goods or generate 8.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
United Rentals vs. DICKS Sporting Goods
Performance |
| Timeline |
| United Rentals |
| DICKS Sporting Goods |
United Rentals and DICKS Sporting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and DICKS Sporting
The main advantage of trading using opposite United Rentals and DICKS Sporting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, DICKS Sporting 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 DICKS Sporting will offset losses from the drop in DICKS Sporting's long position.| United Rentals vs. WillScot Mobile Mini | United Rentals vs. Superior Plus Corp | United Rentals vs. SIVERS SEMICONDUCTORS AB | United Rentals vs. Norsk Hydro ASA |
| DICKS Sporting vs. Superior Plus Corp | DICKS Sporting vs. SIVERS SEMICONDUCTORS AB | DICKS Sporting vs. NorAm Drilling AS | DICKS Sporting vs. Norsk Hydro ASA |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |