Correlation Between United Rentals and First Republic
Can any of the company-specific risk be diversified away by investing in both United Rentals and First Republic 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 First Republic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and First Republic Bank, you can compare the effects of market volatilities on United Rentals and First Republic 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 First Republic. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and First Republic.
Diversification Opportunities for United Rentals and First Republic
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and First is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and First Republic Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Republic 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 First Republic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Republic Bank has no effect on the direction of United Rentals i.e., United Rentals and First Republic go up and down completely randomly.
Pair Corralation between United Rentals and First Republic
If you would invest 81,092 in United Rentals on August 30, 2024 and sell it today you would earn a total of 4,606 from holding United Rentals or generate 5.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
United Rentals vs. First Republic Bank
Performance |
| Timeline |
| United Rentals |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
United Rentals and First Republic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and First Republic
The main advantage of trading using opposite United Rentals and First Republic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, First Republic 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 First Republic will offset losses from the drop in First Republic's long position.| United Rentals vs. HE Equipment Services | United Rentals vs. GATX Corporation | United Rentals vs. McGrath RentCorp | United Rentals vs. Ryder System |
| First Republic vs. Asure Software | First Republic vs. Radcom | First Republic vs. Getty Images Holdings | First Republic vs. Rumble Inc |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |