Correlation Between United Rentals and Carbios
Can any of the company-specific risk be diversified away by investing in both United Rentals and Carbios 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 Carbios into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Carbios, you can compare the effects of market volatilities on United Rentals and Carbios 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 Carbios. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Carbios.
Diversification Opportunities for United Rentals and Carbios
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and Carbios is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Carbios in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carbios 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 Carbios. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carbios has no effect on the direction of United Rentals i.e., United Rentals and Carbios go up and down completely randomly.
Pair Corralation between United Rentals and Carbios
Considering the 90-day investment horizon United Rentals is expected to generate 0.61 times more return on investment than Carbios. However, United Rentals is 1.63 times less risky than Carbios. It trades about 0.08 of its potential returns per unit of risk. Carbios is currently generating about -0.06 per unit of risk. If you would invest 34,711 in United Rentals on September 13, 2024 and sell it today you would earn a total of 44,231 from holding United Rentals or generate 127.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.02% |
| Values | Daily Returns |
United Rentals vs. Carbios
Performance |
| Timeline |
| United Rentals |
| Carbios |
United Rentals and Carbios Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Carbios
The main advantage of trading using opposite United Rentals and Carbios positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Carbios 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 Carbios will offset losses from the drop in Carbios' long position.| United Rentals vs. HE Equipment Services | United Rentals vs. GATX Corporation | United Rentals vs. McGrath RentCorp | United Rentals vs. Alta Equipment Group |
| Carbios vs. Geely Automobile Holdings | Carbios vs. National Beverage Corp | Carbios vs. Motorcar Parts of | Carbios vs. Lery Seafood Group |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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