Correlation Between United Rentals and PC Connection
Can any of the company-specific risk be diversified away by investing in both United Rentals and PC Connection 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 PC Connection into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and PC Connection, you can compare the effects of market volatilities on United Rentals and PC Connection 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 PC Connection. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and PC Connection.
Diversification Opportunities for United Rentals and PC Connection
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and PCC is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and PC Connection in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PC Connection 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 PC Connection. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PC Connection has no effect on the direction of United Rentals i.e., United Rentals and PC Connection go up and down completely randomly.
Pair Corralation between United Rentals and PC Connection
Assuming the 90 days horizon United Rentals is expected to generate 1.18 times more return on investment than PC Connection. However, United Rentals is 1.18 times more volatile than PC Connection. It trades about 0.14 of its potential returns per unit of risk. PC Connection is currently generating about 0.13 per unit of risk. If you would invest 74,172 in United Rentals on September 1, 2024 and sell it today you would earn a total of 7,728 from holding United Rentals or generate 10.42% 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. PC Connection
Performance |
| Timeline |
| United Rentals |
| PC Connection |
United Rentals and PC Connection Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and PC Connection
The main advantage of trading using opposite United Rentals and PC Connection positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, PC Connection 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 PC Connection will offset losses from the drop in PC Connection's long position.| United Rentals vs. MAGNUM MINING EXP | United Rentals vs. Tencent Music Entertainment | United Rentals vs. SYSTEMAIR AB | United Rentals vs. ALTAIR RES INC |
| PC Connection vs. Warner Music Group | PC Connection vs. United Rentals | PC Connection vs. Luckin Coffee | PC Connection vs. Air Lease |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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