Correlation Between United Rentals and Peak Resources
Can any of the company-specific risk be diversified away by investing in both United Rentals and Peak Resources 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 Peak Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Peak Resources Limited, you can compare the effects of market volatilities on United Rentals and Peak Resources 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 Peak Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Peak Resources.
Diversification Opportunities for United Rentals and Peak Resources
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and Peak is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Peak Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peak Resources 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 Peak Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peak Resources has no effect on the direction of United Rentals i.e., United Rentals and Peak Resources go up and down completely randomly.
Pair Corralation between United Rentals and Peak Resources
Considering the 90-day investment horizon United Rentals is expected to generate 0.27 times more return on investment than Peak Resources. However, United Rentals is 3.72 times less risky than Peak Resources. It trades about 0.09 of its potential returns per unit of risk. Peak Resources Limited is currently generating about -0.02 per unit of risk. If you would invest 67,885 in United Rentals on September 3, 2024 and sell it today you would earn a total of 18,715 from holding United Rentals or generate 27.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.69% |
| Values | Daily Returns |
United Rentals vs. Peak Resources Limited
Performance |
| Timeline |
| United Rentals |
| Peak Resources |
United Rentals and Peak Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Peak Resources
The main advantage of trading using opposite United Rentals and Peak Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Peak Resources 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 Peak Resources will offset losses from the drop in Peak Resources' long position.| United Rentals vs. Alta Equipment Group | United Rentals vs. McGrath RentCorp | United Rentals vs. Herc Holdings | United Rentals vs. HE Equipment Services |
| Peak Resources vs. Peak Minerals Limited | Peak Resources vs. Anheuser Busch InBev SANV | Peak Resources vs. AALBERTS IND | Peak Resources vs. SECURITAS B |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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