Correlation Between United Rentals and Aspiriant Defensive
Can any of the company-specific risk be diversified away by investing in both United Rentals and Aspiriant Defensive 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 Aspiriant Defensive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Aspiriant Defensive Allocation, you can compare the effects of market volatilities on United Rentals and Aspiriant Defensive 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 Aspiriant Defensive. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Aspiriant Defensive.
Diversification Opportunities for United Rentals and Aspiriant Defensive
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between United and Aspiriant is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Aspiriant Defensive Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aspiriant Defensive 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 Aspiriant Defensive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aspiriant Defensive has no effect on the direction of United Rentals i.e., United Rentals and Aspiriant Defensive go up and down completely randomly.
Pair Corralation between United Rentals and Aspiriant Defensive
Considering the 90-day investment horizon United Rentals is expected to generate 7.42 times more return on investment than Aspiriant Defensive. However, United Rentals is 7.42 times more volatile than Aspiriant Defensive Allocation. It trades about 0.07 of its potential returns per unit of risk. Aspiriant Defensive Allocation is currently generating about 0.03 per unit of risk. If you would invest 69,834 in United Rentals on September 4, 2024 and sell it today you would earn a total of 15,871 from holding United Rentals or generate 22.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Rentals vs. Aspiriant Defensive Allocation
Performance |
| Timeline |
| United Rentals |
| Aspiriant Defensive |
United Rentals and Aspiriant Defensive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Aspiriant Defensive
The main advantage of trading using opposite United Rentals and Aspiriant Defensive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Aspiriant Defensive 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 Aspiriant Defensive will offset losses from the drop in Aspiriant Defensive'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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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