Correlation Between United Rentals and Janus Henderson
Can any of the company-specific risk be diversified away by investing in both United Rentals and Janus Henderson 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 Janus Henderson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Janus Henderson Net, you can compare the effects of market volatilities on United Rentals and Janus Henderson 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 Janus Henderson. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Janus Henderson.
Diversification Opportunities for United Rentals and Janus Henderson
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Janus is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Janus Henderson Net in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Henderson Net 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 Janus Henderson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Henderson Net has no effect on the direction of United Rentals i.e., United Rentals and Janus Henderson go up and down completely randomly.
Pair Corralation between United Rentals and Janus Henderson
Considering the 90-day investment horizon United Rentals is expected to generate 2.13 times more return on investment than Janus Henderson. However, United Rentals is 2.13 times more volatile than Janus Henderson Net. It trades about 0.09 of its potential returns per unit of risk. Janus Henderson Net is currently generating about 0.03 per unit of risk. If you would invest 40,076 in United Rentals on September 12, 2024 and sell it today you would earn a total of 39,526 from holding United Rentals or generate 98.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.68% |
| Values | Daily Returns |
United Rentals vs. Janus Henderson Net
Performance |
| Timeline |
| United Rentals |
| Janus Henderson Net |
United Rentals and Janus Henderson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Janus Henderson
The main advantage of trading using opposite United Rentals and Janus Henderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Janus Henderson 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 Janus Henderson will offset losses from the drop in Janus Henderson'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 |
| Janus Henderson vs. Betashares Asia Technology | Janus Henderson vs. BetaShares Australia 200 | Janus Henderson vs. Australian High Interest | Janus Henderson vs. Vanguard Global Infrastructure |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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