Correlation Between United Rentals and Fidelity Climate
Can any of the company-specific risk be diversified away by investing in both United Rentals and Fidelity Climate 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 Fidelity Climate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Fidelity Climate Action, you can compare the effects of market volatilities on United Rentals and Fidelity Climate 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 Fidelity Climate. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Fidelity Climate.
Diversification Opportunities for United Rentals and Fidelity Climate
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between United and Fidelity is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Fidelity Climate Action in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Climate Action 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 Fidelity Climate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Climate Action has no effect on the direction of United Rentals i.e., United Rentals and Fidelity Climate go up and down completely randomly.
Pair Corralation between United Rentals and Fidelity Climate
Considering the 90-day investment horizon United Rentals is expected to generate 2.42 times more return on investment than Fidelity Climate. However, United Rentals is 2.42 times more volatile than Fidelity Climate Action. It trades about 0.09 of its potential returns per unit of risk. Fidelity Climate Action is currently generating about 0.08 per unit of risk. If you would invest 35,974 in United Rentals on September 4, 2024 and sell it today you would earn a total of 49,731 from holding United Rentals or generate 138.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Rentals vs. Fidelity Climate Action
Performance |
| Timeline |
| United Rentals |
| Fidelity Climate Action |
United Rentals and Fidelity Climate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Fidelity Climate
The main advantage of trading using opposite United Rentals and Fidelity Climate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Fidelity Climate 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 Fidelity Climate will offset losses from the drop in Fidelity Climate'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 |
| Fidelity Climate vs. Fidelity Pacific Basin | Fidelity Climate vs. Fidelity Europe Fund | Fidelity Climate vs. Fidelity International Capital | Fidelity Climate vs. Fidelity Overseas Fund |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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