Correlation Between United Rentals and State Street
Can any of the company-specific risk be diversified away by investing in both United Rentals and State Street 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 State Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and State Street Master, you can compare the effects of market volatilities on United Rentals and State Street 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 State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and State Street.
Diversification Opportunities for United Rentals and State Street
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and State is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and State Street Master in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Master 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 State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street Master has no effect on the direction of United Rentals i.e., United Rentals and State Street go up and down completely randomly.
Pair Corralation between United Rentals and State Street
If you would invest 78,451 in United Rentals on September 4, 2024 and sell it today you would earn a total of 7,254 from holding United Rentals or generate 9.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Rentals vs. State Street Master
Performance |
| Timeline |
| United Rentals |
| State Street Master |
United Rentals and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and State Street
The main advantage of trading using opposite United Rentals and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street'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 |
| State Street vs. William Blair Large | State Street vs. Rational Strategic Allocation | State Street vs. Principal Lifetime Hybrid | State Street vs. Old Westbury Large |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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