Correlation Between United Rentals and PICC Property
Can any of the company-specific risk be diversified away by investing in both United Rentals and PICC Property 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 PICC Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and PICC Property and, you can compare the effects of market volatilities on United Rentals and PICC Property 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 PICC Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and PICC Property.
Diversification Opportunities for United Rentals and PICC Property
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and PICC is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and PICC Property and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PICC Property 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 PICC Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PICC Property has no effect on the direction of United Rentals i.e., United Rentals and PICC Property go up and down completely randomly.
Pair Corralation between United Rentals and PICC Property
Considering the 90-day investment horizon United Rentals is expected to generate 1.49 times more return on investment than PICC Property. However, United Rentals is 1.49 times more volatile than PICC Property and. It trades about 0.2 of its potential returns per unit of risk. PICC Property and is currently generating about 0.03 per unit of risk. If you would invest 78,451 in United Rentals on September 3, 2024 and sell it today you would earn a total of 8,149 from holding United Rentals or generate 10.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
United Rentals vs. PICC Property and
Performance |
| Timeline |
| United Rentals |
| PICC Property |
United Rentals and PICC Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and PICC Property
The main advantage of trading using opposite United Rentals and PICC Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, PICC Property 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 PICC Property will offset losses from the drop in PICC Property's long position.| United Rentals vs. Alta Equipment Group | United Rentals vs. McGrath RentCorp | United Rentals vs. Herc Holdings | United Rentals vs. HE Equipment Services |
| PICC Property vs. LANDSEA HOMES P | PICC Property vs. DFS Furniture PLC | PICC Property vs. Tri Pointe Homes | PICC Property vs. 24SEVENOFFICE GROUP AB |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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