Correlation Between United Rentals and Future Scholar
Can any of the company-specific risk be diversified away by investing in both United Rentals and Future Scholar 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 Future Scholar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Future Scholar 529, you can compare the effects of market volatilities on United Rentals and Future Scholar 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 Future Scholar. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Future Scholar.
Diversification Opportunities for United Rentals and Future Scholar
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Future is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Future Scholar 529 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Future Scholar 529 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 Future Scholar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Future Scholar 529 has no effect on the direction of United Rentals i.e., United Rentals and Future Scholar go up and down completely randomly.
Pair Corralation between United Rentals and Future Scholar
Considering the 90-day investment horizon United Rentals is expected to generate 7.56 times more return on investment than Future Scholar. However, United Rentals is 7.56 times more volatile than Future Scholar 529. It trades about 0.2 of its potential returns per unit of risk. Future Scholar 529 is currently generating about 0.35 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. Future Scholar 529
Performance |
| Timeline |
| United Rentals |
| Future Scholar 529 |
United Rentals and Future Scholar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Future Scholar
The main advantage of trading using opposite United Rentals and Future Scholar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Future Scholar 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 Future Scholar will offset losses from the drop in Future Scholar'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 |
| Future Scholar vs. Gabelli Global Financial | Future Scholar vs. Prudential Financial Services | Future Scholar vs. Vanguard Financials Index | Future Scholar vs. Fidelity Advisor Financial |
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.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |