Correlation Between United Rentals and Fidelity Series
Can any of the company-specific risk be diversified away by investing in both United Rentals and Fidelity Series 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 Series 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 Series Blue, you can compare the effects of market volatilities on United Rentals and Fidelity Series 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 Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Fidelity Series.
Diversification Opportunities for United Rentals and Fidelity Series
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between United and FIDELITY is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Fidelity Series Blue in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Series Blue 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 Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Series Blue has no effect on the direction of United Rentals i.e., United Rentals and Fidelity Series go up and down completely randomly.
Pair Corralation between United Rentals and Fidelity Series
Considering the 90-day investment horizon United Rentals is expected to generate 1.88 times more return on investment than Fidelity Series. However, United Rentals is 1.88 times more volatile than Fidelity Series Blue. It trades about 0.09 of its potential returns per unit of risk. Fidelity Series Blue is currently generating about 0.13 per unit of risk. If you would invest 34,927 in United Rentals on September 5, 2024 and sell it today you would earn a total of 51,975 from holding United Rentals or generate 148.81% 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 Series Blue
Performance |
| Timeline |
| United Rentals |
| Fidelity Series Blue |
United Rentals and Fidelity Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Fidelity Series
The main advantage of trading using opposite United Rentals and Fidelity Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Fidelity Series 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 Series will offset losses from the drop in Fidelity Series' long position.| United Rentals vs. HE Equipment Services | United Rentals vs. GATX Corporation | United Rentals vs. McGrath RentCorp | United Rentals vs. Alta Equipment Group |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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