Correlation Between United Rentals and Easterly Government
Can any of the company-specific risk be diversified away by investing in both United Rentals and Easterly Government 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 Easterly Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Easterly Government Properties, you can compare the effects of market volatilities on United Rentals and Easterly Government 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 Easterly Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Easterly Government.
Diversification Opportunities for United Rentals and Easterly Government
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between United and Easterly is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Easterly Government Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Easterly Government 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 Easterly Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Easterly Government has no effect on the direction of United Rentals i.e., United Rentals and Easterly Government go up and down completely randomly.
Pair Corralation between United Rentals and Easterly Government
Considering the 90-day investment horizon United Rentals is expected to generate 1.5 times more return on investment than Easterly Government. However, United Rentals is 1.5 times more volatile than Easterly Government Properties. It trades about 0.08 of its potential returns per unit of risk. Easterly Government Properties is currently generating about 0.01 per unit of risk. If you would invest 34,287 in United Rentals on September 12, 2024 and sell it today you would earn a total of 45,315 from holding United Rentals or generate 132.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.21% |
| Values | Daily Returns |
United Rentals vs. Easterly Government Properties
Performance |
| Timeline |
| United Rentals |
| Easterly Government |
United Rentals and Easterly Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Easterly Government
The main advantage of trading using opposite United Rentals and Easterly Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Easterly Government 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 Easterly Government will offset losses from the drop in Easterly Government'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 |
| Easterly Government vs. Office Properties Income | Easterly Government vs. CITY OFFICE REIT | Easterly Government vs. CREMECOMTRSBI DL 001 | Easterly Government vs. Superior Plus Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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