Correlation Between United Rentals and Faisal Islamic
Can any of the company-specific risk be diversified away by investing in both United Rentals and Faisal Islamic 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 Faisal Islamic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Faisal Islamic Bank, you can compare the effects of market volatilities on United Rentals and Faisal Islamic 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 Faisal Islamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Faisal Islamic.
Diversification Opportunities for United Rentals and Faisal Islamic
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Faisal is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Faisal Islamic Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Faisal Islamic Bank 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 Faisal Islamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Faisal Islamic Bank has no effect on the direction of United Rentals i.e., United Rentals and Faisal Islamic go up and down completely randomly.
Pair Corralation between United Rentals and Faisal Islamic
Considering the 90-day investment horizon United Rentals is expected to generate 1.41 times less return on investment than Faisal Islamic. But when comparing it to its historical volatility, United Rentals is 1.56 times less risky than Faisal Islamic. It trades about 0.18 of its potential returns per unit of risk. Faisal Islamic Bank is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 3,093 in Faisal Islamic Bank on September 3, 2024 and sell it today you would earn a total of 814.00 from holding Faisal Islamic Bank or generate 26.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 81.25% |
| Values | Daily Returns |
United Rentals vs. Faisal Islamic Bank
Performance |
| Timeline |
| United Rentals |
| Faisal Islamic Bank |
United Rentals and Faisal Islamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Faisal Islamic
The main advantage of trading using opposite United Rentals and Faisal Islamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Faisal Islamic 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 Faisal Islamic will offset losses from the drop in Faisal Islamic'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 |
| Faisal Islamic vs. Egyptian Chemical Industries | Faisal Islamic vs. Cairo For Investment | Faisal Islamic vs. B Investments Holding | Faisal Islamic vs. Delta Insurance |
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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