Correlation Between United Rentals and Grupo Posadas

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Can any of the company-specific risk be diversified away by investing in both United Rentals and Grupo Posadas 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 Grupo Posadas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Grupo Posadas SAB, you can compare the effects of market volatilities on United Rentals and Grupo Posadas 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 Grupo Posadas. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Grupo Posadas.

Diversification Opportunities for United Rentals and Grupo Posadas

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between United and Grupo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Grupo Posadas SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Posadas SAB 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 Grupo Posadas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Posadas SAB has no effect on the direction of United Rentals i.e., United Rentals and Grupo Posadas go up and down completely randomly.

Pair Corralation between United Rentals and Grupo Posadas

If you would invest  34,711  in United Rentals on September 13, 2024 and sell it today you would earn a total of  44,231  from holding United Rentals or generate 127.43% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

United Rentals  vs.  Grupo Posadas SAB

 Performance 
       Timeline  
United Rentals 

Risk-Adjusted Performance

6 of 100

 
Weak
 
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Modest
Compared to the overall equity markets, risk-adjusted returns on investments in United Rentals are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, United Rentals may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Grupo Posadas SAB 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Grupo Posadas SAB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Grupo Posadas is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

United Rentals and Grupo Posadas Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with United Rentals and Grupo Posadas

The main advantage of trading using opposite United Rentals and Grupo Posadas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Grupo Posadas 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 Grupo Posadas will offset losses from the drop in Grupo Posadas' long position.
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The idea behind United Rentals and Grupo Posadas SAB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.

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