Correlation Between United Rentals and Fidelity National
Can any of the company-specific risk be diversified away by investing in both United Rentals and Fidelity National 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 Fidelity National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Fidelity National Information, you can compare the effects of market volatilities on United Rentals and Fidelity National 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 Fidelity National. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Fidelity National.
Diversification Opportunities for United Rentals and Fidelity National
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Fidelity is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Fidelity National Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity National 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 Fidelity National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity National has no effect on the direction of United Rentals i.e., United Rentals and Fidelity National go up and down completely randomly.
Pair Corralation between United Rentals and Fidelity National
Assuming the 90 days horizon United Rentals is expected to generate 2.42 times more return on investment than Fidelity National. However, United Rentals is 2.42 times more volatile than Fidelity National Information. It trades about 0.25 of its potential returns per unit of risk. Fidelity National Information is currently generating about 0.09 per unit of risk. If you would invest 67,200 in United Rentals on November 3, 2024 and sell it today you would earn a total of 8,080 from holding United Rentals or generate 12.02% 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. Fidelity National Information
Performance |
| Timeline |
| United Rentals |
| Fidelity National |
United Rentals and Fidelity National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Fidelity National
The main advantage of trading using opposite United Rentals and Fidelity National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Fidelity National 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 Fidelity National will offset losses from the drop in Fidelity National's long position.| United Rentals vs. OPKO HEALTH | United Rentals vs. Sims Metal Management | United Rentals vs. Tencent Music Entertainment | United Rentals vs. Molina Healthcare |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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