Correlation Between United Rentals and OAKTRSPECLENDNEW
Can any of the company-specific risk be diversified away by investing in both United Rentals and OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and OAKTRSPECLENDNEW, you can compare the effects of market volatilities on United Rentals and OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and OAKTRSPECLENDNEW.
Diversification Opportunities for United Rentals and OAKTRSPECLENDNEW
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and OAKTRSPECLENDNEW is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and OAKTRSPECLENDNEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OAKTRSPECLENDNEW has no effect on the direction of United Rentals i.e., United Rentals and OAKTRSPECLENDNEW go up and down completely randomly.
Pair Corralation between United Rentals and OAKTRSPECLENDNEW
Assuming the 90 days horizon United Rentals is expected to generate 1.68 times more return on investment than OAKTRSPECLENDNEW. However, United Rentals is 1.68 times more volatile than OAKTRSPECLENDNEW. It trades about 0.08 of its potential returns per unit of risk. OAKTRSPECLENDNEW is currently generating about 0.0 per unit of risk. If you would invest 34,821 in United Rentals on August 31, 2024 and sell it today you would earn a total of 47,079 from holding United Rentals or generate 135.2% 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. OAKTRSPECLENDNEW
Performance |
| Timeline |
| United Rentals |
| OAKTRSPECLENDNEW |
United Rentals and OAKTRSPECLENDNEW Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and OAKTRSPECLENDNEW
The main advantage of trading using opposite United Rentals and OAKTRSPECLENDNEW positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW will offset losses from the drop in OAKTRSPECLENDNEW's long position.| United Rentals vs. FUYO GENERAL LEASE | United Rentals vs. Sumitomo Chemical | United Rentals vs. TIANDE CHEMICAL | United Rentals vs. Sanyo Chemical Industries |
| OAKTRSPECLENDNEW vs. Apple Inc | OAKTRSPECLENDNEW vs. Apple Inc | OAKTRSPECLENDNEW vs. Apple Inc | OAKTRSPECLENDNEW 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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