Correlation Between United Rentals and Tachan Securities
Can any of the company-specific risk be diversified away by investing in both United Rentals and Tachan Securities 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 Tachan Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Tachan Securities Co, you can compare the effects of market volatilities on United Rentals and Tachan Securities 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 Tachan Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Tachan Securities.
Diversification Opportunities for United Rentals and Tachan Securities
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between United and Tachan is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Tachan Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tachan Securities 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 Tachan Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tachan Securities has no effect on the direction of United Rentals i.e., United Rentals and Tachan Securities go up and down completely randomly.
Pair Corralation between United Rentals and Tachan Securities
Considering the 90-day investment horizon United Rentals is expected to generate 3.48 times more return on investment than Tachan Securities. However, United Rentals is 3.48 times more volatile than Tachan Securities Co. It trades about 0.09 of its potential returns per unit of risk. Tachan Securities Co is currently generating about 0.03 per unit of risk. If you would invest 40,076 in United Rentals on September 12, 2024 and sell it today you would earn a total of 39,526 from holding United Rentals or generate 98.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.12% |
| Values | Daily Returns |
United Rentals vs. Tachan Securities Co
Performance |
| Timeline |
| United Rentals |
| Tachan Securities |
United Rentals and Tachan Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Tachan Securities
The main advantage of trading using opposite United Rentals and Tachan Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Tachan Securities 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 Tachan Securities will offset losses from the drop in Tachan Securities' long position.| United Rentals vs. HE Equipment Services | United Rentals vs. GATX Corporation | United Rentals vs. McGrath RentCorp | United Rentals vs. Alta Equipment Group |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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