Correlation Between United Rentals and Neogen
Can any of the company-specific risk be diversified away by investing in both United Rentals and Neogen 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 Neogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Neogen, you can compare the effects of market volatilities on United Rentals and Neogen 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 Neogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Neogen.
Diversification Opportunities for United Rentals and Neogen
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between United and Neogen is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Neogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neogen 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 Neogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neogen has no effect on the direction of United Rentals i.e., United Rentals and Neogen go up and down completely randomly.
Pair Corralation between United Rentals and Neogen
Considering the 90-day investment horizon United Rentals is expected to generate 0.83 times more return on investment than Neogen. However, United Rentals is 1.2 times less risky than Neogen. It trades about 0.11 of its potential returns per unit of risk. Neogen is currently generating about 0.02 per unit of risk. If you would invest 82,310 in United Rentals on August 29, 2024 and sell it today you would earn a total of 5,007 from holding United Rentals or generate 6.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Rentals vs. Neogen
Performance |
| Timeline |
| United Rentals |
| Neogen |
United Rentals and Neogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Neogen
The main advantage of trading using opposite United Rentals and Neogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Neogen 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 Neogen will offset losses from the drop in Neogen'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 |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |