Correlation Between United Rentals and Coronation Financial
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By analyzing existing cross correlation between United Rentals and Coronation Financial, you can compare the effects of market volatilities on United Rentals and Coronation Financial 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 Coronation Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Coronation Financial.
Diversification Opportunities for United Rentals and Coronation Financial
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Coronation is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Coronation Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coronation Financial 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 Coronation Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coronation Financial has no effect on the direction of United Rentals i.e., United Rentals and Coronation Financial go up and down completely randomly.
Pair Corralation between United Rentals and Coronation Financial
Considering the 90-day investment horizon United Rentals is expected to generate 2.06 times more return on investment than Coronation Financial. However, United Rentals is 2.06 times more volatile than Coronation Financial. It trades about 0.09 of its potential returns per unit of risk. Coronation Financial is currently generating about 0.06 per unit of risk. If you would invest 35,864 in United Rentals on September 3, 2024 and sell it today you would earn a total of 50,736 from holding United Rentals or generate 141.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.99% |
| Values | Daily Returns |
United Rentals vs. Coronation Financial
Performance |
| Timeline |
| United Rentals |
| Coronation Financial |
United Rentals and Coronation Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Coronation Financial
The main advantage of trading using opposite United Rentals and Coronation Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Coronation Financial 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 Coronation Financial will offset losses from the drop in Coronation Financial's long position.| United Rentals vs. Alta Equipment Group | United Rentals vs. McGrath RentCorp | United Rentals vs. Herc Holdings | United Rentals vs. HE Equipment Services |
| Coronation Financial vs. Coronation Balanced Plus | Coronation Financial vs. Coronation Industrial | Coronation Financial vs. Coronation Capital Plus | Coronation Financial vs. Coronation Global Equity |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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