Correlation Between United Rentals and ICZOOM Group
Can any of the company-specific risk be diversified away by investing in both United Rentals and ICZOOM Group 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 ICZOOM Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and ICZOOM Group Class, you can compare the effects of market volatilities on United Rentals and ICZOOM Group 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 ICZOOM Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and ICZOOM Group.
Diversification Opportunities for United Rentals and ICZOOM Group
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and ICZOOM is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and ICZOOM Group Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICZOOM Group Class 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 ICZOOM Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICZOOM Group Class has no effect on the direction of United Rentals i.e., United Rentals and ICZOOM Group go up and down completely randomly.
Pair Corralation between United Rentals and ICZOOM Group
Considering the 90-day investment horizon United Rentals is expected to under-perform the ICZOOM Group. But the stock apears to be less risky and, when comparing its historical volatility, United Rentals is 1.71 times less risky than ICZOOM Group. The stock trades about -0.05 of its potential returns per unit of risk. The ICZOOM Group Class is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 229.00 in ICZOOM Group Class on January 7, 2025 and sell it today you would lose (56.00) from holding ICZOOM Group Class or give up 24.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Rentals vs. ICZOOM Group Class
Performance |
| Timeline |
| United Rentals |
| ICZOOM Group Class |
United Rentals and ICZOOM Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and ICZOOM Group
The main advantage of trading using opposite United Rentals and ICZOOM Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, ICZOOM Group 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 ICZOOM Group will offset losses from the drop in ICZOOM Group'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 |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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