Correlation Between United Rentals and Socket Mobile
Can any of the company-specific risk be diversified away by investing in both United Rentals and Socket Mobile 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 Socket Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Socket Mobile, you can compare the effects of market volatilities on United Rentals and Socket Mobile 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 Socket Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Socket Mobile.
Diversification Opportunities for United Rentals and Socket Mobile
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Socket is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Socket Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Socket Mobile 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 Socket Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Socket Mobile has no effect on the direction of United Rentals i.e., United Rentals and Socket Mobile go up and down completely randomly.
Pair Corralation between United Rentals and Socket Mobile
Considering the 90-day investment horizon United Rentals is expected to generate 0.75 times more return on investment than Socket Mobile. However, United Rentals is 1.34 times less risky than Socket Mobile. It trades about 0.09 of its potential returns per unit of risk. Socket Mobile is currently generating about -0.01 per unit of risk. If you would invest 34,458 in United Rentals on August 30, 2024 and sell it today you would earn a total of 51,240 from holding United Rentals or generate 148.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Rentals vs. Socket Mobile
Performance |
| Timeline |
| United Rentals |
| Socket Mobile |
United Rentals and Socket Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Socket Mobile
The main advantage of trading using opposite United Rentals and Socket Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Socket Mobile 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 Socket Mobile will offset losses from the drop in Socket Mobile'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 |
| Socket Mobile vs. Cricut Inc | Socket Mobile vs. Nano Dimension | Socket Mobile vs. IONQ Inc | Socket Mobile vs. AGM Group Holdings |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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