Correlation Between United Rentals and The Fixed
Can any of the company-specific risk be diversified away by investing in both United Rentals and The Fixed 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 The Fixed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and The Fixed Income, you can compare the effects of market volatilities on United Rentals and The Fixed 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 The Fixed. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and The Fixed.
Diversification Opportunities for United Rentals and The Fixed
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between United and THE is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and The Fixed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fixed Income 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 The Fixed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fixed Income has no effect on the direction of United Rentals i.e., United Rentals and The Fixed go up and down completely randomly.
Pair Corralation between United Rentals and The Fixed
Considering the 90-day investment horizon United Rentals is expected to generate 12.73 times more return on investment than The Fixed. However, United Rentals is 12.73 times more volatile than The Fixed Income. It trades about 0.2 of its potential returns per unit of risk. The Fixed Income is currently generating about 0.44 per unit of risk. If you would invest 78,451 in United Rentals on September 4, 2024 and sell it today you would earn a total of 8,451 from holding United Rentals or generate 10.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
United Rentals vs. The Fixed Income
Performance |
| Timeline |
| United Rentals |
| Fixed Income |
United Rentals and The Fixed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and The Fixed
The main advantage of trading using opposite United Rentals and The Fixed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, The Fixed 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 The Fixed will offset losses from the drop in The Fixed'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 |
| The Fixed vs. Vanguard Total Stock | The Fixed vs. Vanguard 500 Index | The Fixed vs. Vanguard Total Stock | The Fixed vs. Vanguard Total Stock |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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