Correlation Between United Rentals and SCANSOURCE (SC3SG)
Can any of the company-specific risk be diversified away by investing in both United Rentals and SCANSOURCE (SC3SG) 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 SCANSOURCE (SC3SG) into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and SCANSOURCE, you can compare the effects of market volatilities on United Rentals and SCANSOURCE (SC3SG) 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 SCANSOURCE (SC3SG). Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and SCANSOURCE (SC3SG).
Diversification Opportunities for United Rentals and SCANSOURCE (SC3SG)
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and SCANSOURCE is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and SCANSOURCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCANSOURCE (SC3SG) 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 SCANSOURCE (SC3SG). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCANSOURCE (SC3SG) has no effect on the direction of United Rentals i.e., United Rentals and SCANSOURCE (SC3SG) go up and down completely randomly.
Pair Corralation between United Rentals and SCANSOURCE (SC3SG)
Assuming the 90 days horizon United Rentals is expected to generate 1.13 times more return on investment than SCANSOURCE (SC3SG). However, United Rentals is 1.13 times more volatile than SCANSOURCE. It trades about 0.13 of its potential returns per unit of risk. SCANSOURCE is currently generating about 0.06 per unit of risk. If you would invest 66,427 in United Rentals on September 3, 2024 and sell it today you would earn a total of 14,313 from holding United Rentals or generate 21.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Rentals vs. SCANSOURCE
Performance |
| Timeline |
| United Rentals |
| SCANSOURCE (SC3SG) |
United Rentals and SCANSOURCE (SC3SG) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and SCANSOURCE (SC3SG)
The main advantage of trading using opposite United Rentals and SCANSOURCE (SC3SG) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, SCANSOURCE (SC3SG) 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 SCANSOURCE (SC3SG) will offset losses from the drop in SCANSOURCE (SC3SG)'s long position.| United Rentals vs. Ashtead Group plc | United Rentals vs. WillScot Mobile Mini | United Rentals vs. Sixt SE |
| SCANSOURCE (SC3SG) vs. Plastic Omnium | SCANSOURCE (SC3SG) vs. APPLIED MATERIALS | SCANSOURCE (SC3SG) vs. VULCAN MATERIALS | SCANSOURCE (SC3SG) vs. United Rentals |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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