Correlation Between United Rentals and Resqunit
Can any of the company-specific risk be diversified away by investing in both United Rentals and Resqunit 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 Resqunit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Resqunit AB, you can compare the effects of market volatilities on United Rentals and Resqunit 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 Resqunit. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Resqunit.
Diversification Opportunities for United Rentals and Resqunit
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and Resqunit is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Resqunit AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Resqunit AB 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 Resqunit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Resqunit AB has no effect on the direction of United Rentals i.e., United Rentals and Resqunit go up and down completely randomly.
Pair Corralation between United Rentals and Resqunit
Considering the 90-day investment horizon United Rentals is expected to generate 8.02 times less return on investment than Resqunit. But when comparing it to its historical volatility, United Rentals is 13.68 times less risky than Resqunit. It trades about 0.17 of its potential returns per unit of risk. Resqunit AB is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 30.00 in Resqunit AB on September 4, 2024 and sell it today you would lose (10.00) from holding Resqunit AB or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Rentals vs. Resqunit AB
Performance |
| Timeline |
| United Rentals |
| Resqunit AB |
United Rentals and Resqunit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Resqunit
The main advantage of trading using opposite United Rentals and Resqunit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Resqunit 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 Resqunit will offset losses from the drop in Resqunit'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 |
| Resqunit vs. ZAZZ Energy of | Resqunit vs. Triboron International AB | Resqunit vs. NCAB Group | Resqunit vs. Vimian 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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