Correlation Between United Rentals and Jackson Square
Can any of the company-specific risk be diversified away by investing in both United Rentals and Jackson Square 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 Jackson Square into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Jackson Square Large Cap, you can compare the effects of market volatilities on United Rentals and Jackson Square 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 Jackson Square. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Jackson Square.
Diversification Opportunities for United Rentals and Jackson Square
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between United and Jackson is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Jackson Square Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jackson Square Large 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 Jackson Square. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jackson Square Large has no effect on the direction of United Rentals i.e., United Rentals and Jackson Square go up and down completely randomly.
Pair Corralation between United Rentals and Jackson Square
Considering the 90-day investment horizon United Rentals is expected to generate 3.21 times more return on investment than Jackson Square. However, United Rentals is 3.21 times more volatile than Jackson Square Large Cap. It trades about 0.19 of its potential returns per unit of risk. Jackson Square Large Cap is currently generating about 0.29 per unit of risk. If you would invest 78,451 in United Rentals on September 5, 2024 and sell it today you would earn a total of 8,373 from holding United Rentals or generate 10.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
United Rentals vs. Jackson Square Large Cap
Performance |
| Timeline |
| United Rentals |
| Jackson Square Large |
United Rentals and Jackson Square Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Jackson Square
The main advantage of trading using opposite United Rentals and Jackson Square positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Jackson Square 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 Jackson Square will offset losses from the drop in Jackson Square'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 |
| Jackson Square vs. Jackson Square Smid Cap | Jackson Square vs. Jackson Square Smid Cap | Jackson Square vs. Jackson Square Smid Cap |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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