Correlation Between United Rentals and One Choice
Can any of the company-specific risk be diversified away by investing in both United Rentals and One Choice 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 One Choice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and One Choice 2035, you can compare the effects of market volatilities on United Rentals and One Choice 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 One Choice. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and One Choice.
Diversification Opportunities for United Rentals and One Choice
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and One is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and One Choice 2035 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Choice 2035 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 One Choice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Choice 2035 has no effect on the direction of United Rentals i.e., United Rentals and One Choice go up and down completely randomly.
Pair Corralation between United Rentals and One Choice
Considering the 90-day investment horizon United Rentals is expected to generate 7.46 times more return on investment than One Choice. However, United Rentals is 7.46 times more volatile than One Choice 2035. It trades about 0.2 of its potential returns per unit of risk. One Choice 2035 is currently generating about 0.38 per unit of risk. If you would invest 78,451 in United Rentals on September 3, 2024 and sell it today you would earn a total of 8,149 from holding United Rentals or generate 10.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Rentals vs. One Choice 2035
Performance |
| Timeline |
| United Rentals |
| One Choice 2035 |
United Rentals and One Choice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and One Choice
The main advantage of trading using opposite United Rentals and One Choice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, One Choice 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 One Choice will offset losses from the drop in One Choice'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 |
| One Choice vs. Vanguard Target Retirement | One Choice vs. American Funds 2035 | One Choice vs. American Funds 2035 | One Choice vs. American Funds 2035 |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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