Correlation Between United Rentals and Catholic Responsible
Can any of the company-specific risk be diversified away by investing in both United Rentals and Catholic Responsible 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 Catholic Responsible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Catholic Responsible Investments, you can compare the effects of market volatilities on United Rentals and Catholic Responsible 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 Catholic Responsible. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Catholic Responsible.
Diversification Opportunities for United Rentals and Catholic Responsible
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between United and Catholic is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Catholic Responsible Investmen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catholic Responsible 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 Catholic Responsible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catholic Responsible has no effect on the direction of United Rentals i.e., United Rentals and Catholic Responsible go up and down completely randomly.
Pair Corralation between United Rentals and Catholic Responsible
Considering the 90-day investment horizon United Rentals is expected to generate 12.32 times more return on investment than Catholic Responsible. However, United Rentals is 12.32 times more volatile than Catholic Responsible Investments. It trades about 0.11 of its potential returns per unit of risk. Catholic Responsible Investments is currently generating about 0.15 per unit of risk. If you would invest 50,059 in United Rentals on September 4, 2024 and sell it today you would earn a total of 36,843 from holding United Rentals or generate 73.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
United Rentals vs. Catholic Responsible Investmen
Performance |
| Timeline |
| United Rentals |
| Catholic Responsible |
United Rentals and Catholic Responsible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Catholic Responsible
The main advantage of trading using opposite United Rentals and Catholic Responsible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Catholic Responsible 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 Catholic Responsible will offset losses from the drop in Catholic Responsible'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 |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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