Correlation Between United Rentals and Leverage Shares
Can any of the company-specific risk be diversified away by investing in both United Rentals and Leverage Shares 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 Leverage Shares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Leverage Shares 2x, you can compare the effects of market volatilities on United Rentals and Leverage Shares 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 Leverage Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Leverage Shares.
Diversification Opportunities for United Rentals and Leverage Shares
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Leverage is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Leverage Shares 2x in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leverage Shares 2x 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 Leverage Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leverage Shares 2x has no effect on the direction of United Rentals i.e., United Rentals and Leverage Shares go up and down completely randomly.
Pair Corralation between United Rentals and Leverage Shares
Considering the 90-day investment horizon United Rentals is expected to under-perform the Leverage Shares. In addition to that, United Rentals is 1.03 times more volatile than Leverage Shares 2x. It trades about -0.25 of its total potential returns per unit of risk. Leverage Shares 2x is currently generating about 0.45 per unit of volatility. If you would invest 2,635 in Leverage Shares 2x on September 12, 2024 and sell it today you would earn a total of 452.00 from holding Leverage Shares 2x or generate 17.15% 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. Leverage Shares 2x
Performance |
| Timeline |
| United Rentals |
| Leverage Shares 2x |
United Rentals and Leverage Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Leverage Shares
The main advantage of trading using opposite United Rentals and Leverage Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Leverage Shares 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 Leverage Shares will offset losses from the drop in Leverage Shares' long position.| United Rentals vs. HE Equipment Services | United Rentals vs. GATX Corporation | United Rentals vs. McGrath RentCorp | United Rentals vs. Alta Equipment Group |
| Leverage Shares vs. SPDR Dow Jones | Leverage Shares vs. iShares Core MSCI | Leverage Shares vs. iShares SP 500 | Leverage Shares vs. Vanguard FTSE All World |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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