Correlation Between United Rentals and Hartford Total
Can any of the company-specific risk be diversified away by investing in both United Rentals and Hartford Total 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 Hartford Total 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 Hartford Total, you can compare the effects of market volatilities on United Rentals and Hartford Total 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 Hartford Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Hartford Total.
Diversification Opportunities for United Rentals and Hartford Total
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and Hartford is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and The Hartford Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Total 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 Hartford Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Total has no effect on the direction of United Rentals i.e., United Rentals and Hartford Total go up and down completely randomly.
Pair Corralation between United Rentals and Hartford Total
Considering the 90-day investment horizon United Rentals is expected to generate 6.21 times more return on investment than Hartford Total. However, United Rentals is 6.21 times more volatile than The Hartford Total. It trades about 0.11 of its potential returns per unit of risk. The Hartford Total is currently generating about 0.08 per unit of risk. If you would invest 50,059 in United Rentals on September 4, 2024 and sell it today you would earn a total of 35,646 from holding United Rentals or generate 71.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
United Rentals vs. The Hartford Total
Performance |
| Timeline |
| United Rentals |
| Hartford Total |
United Rentals and Hartford Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Hartford Total
The main advantage of trading using opposite United Rentals and Hartford Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Hartford Total 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 Hartford Total will offset losses from the drop in Hartford Total'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 |
| Hartford Total vs. The Hartford Growth | Hartford Total vs. The Hartford Growth | Hartford Total vs. The Hartford Growth | Hartford Total vs. The Hartford Growth |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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