Correlation Between United Rentals and ANGLE Plc
Can any of the company-specific risk be diversified away by investing in both United Rentals and ANGLE Plc 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 ANGLE Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and ANGLE plc, you can compare the effects of market volatilities on United Rentals and ANGLE Plc 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 ANGLE Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and ANGLE Plc.
Diversification Opportunities for United Rentals and ANGLE Plc
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and ANGLE is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and ANGLE plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANGLE plc 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 ANGLE Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANGLE plc has no effect on the direction of United Rentals i.e., United Rentals and ANGLE Plc go up and down completely randomly.
Pair Corralation between United Rentals and ANGLE Plc
Considering the 90-day investment horizon United Rentals is expected to generate 2.72 times less return on investment than ANGLE Plc. But when comparing it to its historical volatility, United Rentals is 2.32 times less risky than ANGLE Plc. It trades about 0.17 of its potential returns per unit of risk. ANGLE plc is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 800.00 in ANGLE plc on September 4, 2024 and sell it today you would earn a total of 200.00 from holding ANGLE plc or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Rentals vs. ANGLE plc
Performance |
| Timeline |
| United Rentals |
| ANGLE plc |
United Rentals and ANGLE Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and ANGLE Plc
The main advantage of trading using opposite United Rentals and ANGLE Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, ANGLE Plc 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 ANGLE Plc will offset losses from the drop in ANGLE Plc's long position.| United Rentals vs. HE Equipment Services | United Rentals vs. GATX Corporation | United Rentals vs. McGrath RentCorp | United Rentals vs. Alta Equipment Group |
| ANGLE Plc vs. Austevoll Seafood ASA | ANGLE Plc vs. Monster Beverage Corp | ANGLE Plc vs. InterContinental Hotels Group | ANGLE Plc vs. National Beverage Corp |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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