Correlation Between United Rentals and Avis Budget
Can any of the company-specific risk be diversified away by investing in both United Rentals and Avis Budget 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 Avis Budget into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Avis Budget Group, you can compare the effects of market volatilities on United Rentals and Avis Budget 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 Avis Budget. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Avis Budget.
Diversification Opportunities for United Rentals and Avis Budget
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Avis is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Avis Budget Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avis Budget Group 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 Avis Budget. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avis Budget Group has no effect on the direction of United Rentals i.e., United Rentals and Avis Budget go up and down completely randomly.
Pair Corralation between United Rentals and Avis Budget
Considering the 90-day investment horizon United Rentals is expected to generate 1.64 times less return on investment than Avis Budget. But when comparing it to its historical volatility, United Rentals is 1.05 times less risky than Avis Budget. It trades about 0.18 of its potential returns per unit of risk. Avis Budget Group is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 8,098 in Avis Budget Group on October 21, 2024 and sell it today you would earn a total of 921.00 from holding Avis Budget Group or generate 11.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Rentals vs. Avis Budget Group
Performance |
| Timeline |
| United Rentals |
| Avis Budget Group |
United Rentals and Avis Budget Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Avis Budget
The main advantage of trading using opposite United Rentals and Avis Budget positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Avis Budget 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 Avis Budget will offset losses from the drop in Avis Budget'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 |
| Avis Budget vs. Hertz Global Hldgs | Avis Budget vs. Ryder System | Avis Budget vs. HE Equipment Services | Avis Budget vs. United Rentals |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |