Correlation Between United Rentals and Blue Sky
Can any of the company-specific risk be diversified away by investing in both United Rentals and Blue Sky 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 Blue Sky into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Blue Sky Uranium, you can compare the effects of market volatilities on United Rentals and Blue Sky 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 Blue Sky. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Blue Sky.
Diversification Opportunities for United Rentals and Blue Sky
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between United and Blue is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Blue Sky Uranium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Sky Uranium 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 Blue Sky. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Sky Uranium has no effect on the direction of United Rentals i.e., United Rentals and Blue Sky go up and down completely randomly.
Pair Corralation between United Rentals and Blue Sky
Considering the 90-day investment horizon United Rentals is expected to generate 4.57 times less return on investment than Blue Sky. But when comparing it to its historical volatility, United Rentals is 6.19 times less risky than Blue Sky. It trades about 0.08 of its potential returns per unit of risk. Blue Sky Uranium is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3.72 in Blue Sky Uranium on September 12, 2024 and sell it today you would lose (0.72) from holding Blue Sky Uranium or give up 19.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.32% |
| Values | Daily Returns |
United Rentals vs. Blue Sky Uranium
Performance |
| Timeline |
| United Rentals |
| Blue Sky Uranium |
United Rentals and Blue Sky Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Blue Sky
The main advantage of trading using opposite United Rentals and Blue Sky positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Blue Sky 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 Blue Sky will offset losses from the drop in Blue Sky'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 |
| Blue Sky vs. Benchmark Electronics | Blue Sky vs. AOI Electronics Co | Blue Sky vs. Coeur Mining | Blue Sky vs. Evolution Mining Limited |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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