Correlation Between United Rentals and Columbia Minnesota
Can any of the company-specific risk be diversified away by investing in both United Rentals and Columbia Minnesota 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 Columbia Minnesota into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Columbia Minnesota Tax Exempt, you can compare the effects of market volatilities on United Rentals and Columbia Minnesota 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 Columbia Minnesota. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Columbia Minnesota.
Diversification Opportunities for United Rentals and Columbia Minnesota
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between United and Columbia is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Columbia Minnesota Tax Exempt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Minnesota Tax 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 Columbia Minnesota. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Minnesota Tax has no effect on the direction of United Rentals i.e., United Rentals and Columbia Minnesota go up and down completely randomly.
Pair Corralation between United Rentals and Columbia Minnesota
Considering the 90-day investment horizon United Rentals is expected to generate 6.73 times more return on investment than Columbia Minnesota. However, United Rentals is 6.73 times more volatile than Columbia Minnesota Tax Exempt. It trades about 0.2 of its potential returns per unit of risk. Columbia Minnesota Tax Exempt is currently generating about 0.2 per unit of risk. If you would invest 78,451 in United Rentals on September 4, 2024 and sell it today you would earn a total of 8,451 from holding United Rentals or generate 10.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Rentals vs. Columbia Minnesota Tax Exempt
Performance |
| Timeline |
| United Rentals |
| Columbia Minnesota Tax |
United Rentals and Columbia Minnesota Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Columbia Minnesota
The main advantage of trading using opposite United Rentals and Columbia Minnesota positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Columbia Minnesota 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 Columbia Minnesota will offset losses from the drop in Columbia Minnesota'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 |
| Columbia Minnesota vs. Fidelity Advisor Energy | Columbia Minnesota vs. Gamco Natural Resources | Columbia Minnesota vs. Clearbridge Energy Mlp | Columbia Minnesota vs. Oil Gas Ultrasector |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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