Correlation Between United Rentals and CK Infrastructure
Can any of the company-specific risk be diversified away by investing in both United Rentals and CK Infrastructure 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 CK Infrastructure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and CK Infrastructure Holdings, you can compare the effects of market volatilities on United Rentals and CK Infrastructure 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 CK Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and CK Infrastructure.
Diversification Opportunities for United Rentals and CK Infrastructure
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between United and CHH is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and CK Infrastructure Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CK Infrastructure 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 CK Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CK Infrastructure has no effect on the direction of United Rentals i.e., United Rentals and CK Infrastructure go up and down completely randomly.
Pair Corralation between United Rentals and CK Infrastructure
Considering the 90-day investment horizon United Rentals is expected to generate 0.74 times more return on investment than CK Infrastructure. However, United Rentals is 1.36 times less risky than CK Infrastructure. It trades about 0.1 of its potential returns per unit of risk. CK Infrastructure Holdings is currently generating about 0.02 per unit of risk. If you would invest 71,129 in United Rentals on September 12, 2024 and sell it today you would earn a total of 8,473 from holding United Rentals or generate 11.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
United Rentals vs. CK Infrastructure Holdings
Performance |
| Timeline |
| United Rentals |
| CK Infrastructure |
United Rentals and CK Infrastructure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and CK Infrastructure
The main advantage of trading using opposite United Rentals and CK Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, CK Infrastructure 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 CK Infrastructure will offset losses from the drop in CK Infrastructure'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 |
| CK Infrastructure vs. ANGLER GAMING PLC | CK Infrastructure vs. Media and Games | CK Infrastructure vs. EAST SIDE GAMES | CK Infrastructure vs. Zijin Mining 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| CEOs Directory Screen CEOs from public companies around the world | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Stocks Directory Find actively traded stocks across global markets |