Correlation Between United Rentals and Ampersand Sanlam

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Can any of the company-specific risk be diversified away by investing in both United Rentals and Ampersand Sanlam 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 Ampersand Sanlam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Ampersand Sanlam Collective, you can compare the effects of market volatilities on United Rentals and Ampersand Sanlam 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 Ampersand Sanlam. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Ampersand Sanlam.

Diversification Opportunities for United Rentals and Ampersand Sanlam

0.86
  Correlation Coefficient

Very poor diversification

The 3 months correlation between United and Ampersand is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Ampersand Sanlam Collective in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ampersand Sanlam Col 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 Ampersand Sanlam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ampersand Sanlam Col has no effect on the direction of United Rentals i.e., United Rentals and Ampersand Sanlam go up and down completely randomly.

Pair Corralation between United Rentals and Ampersand Sanlam

Considering the 90-day investment horizon United Rentals is expected to generate 4.18 times more return on investment than Ampersand Sanlam. However, United Rentals is 4.18 times more volatile than Ampersand Sanlam Collective. It trades about 0.11 of its potential returns per unit of risk. Ampersand Sanlam Collective is currently generating about 0.07 per unit of risk. If you would invest  38,457  in United Rentals on September 4, 2024 and sell it today you would earn a total of  47,248  from holding United Rentals or generate 122.86% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy98.66%
ValuesDaily Returns

United Rentals  vs.  Ampersand Sanlam Collective

 Performance 
       Timeline  
United Rentals 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in United Rentals are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, United Rentals demonstrated solid returns over the last few months and may actually be approaching a breakup point.
Ampersand Sanlam Col 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Ampersand Sanlam Collective are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively steady basic indicators, Ampersand Sanlam is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

United Rentals and Ampersand Sanlam Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with United Rentals and Ampersand Sanlam

The main advantage of trading using opposite United Rentals and Ampersand Sanlam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Ampersand Sanlam 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 Ampersand Sanlam will offset losses from the drop in Ampersand Sanlam's long position.
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The idea behind United Rentals and Ampersand Sanlam Collective pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

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