Correlation Between United Rentals and SAF Holland
Can any of the company-specific risk be diversified away by investing in both United Rentals and SAF Holland 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 SAF Holland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and SAF Holland SA, you can compare the effects of market volatilities on United Rentals and SAF Holland 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 SAF Holland. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and SAF Holland.
Diversification Opportunities for United Rentals and SAF Holland
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and SAF is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and SAF Holland SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAF Holland SA 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 SAF Holland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAF Holland SA has no effect on the direction of United Rentals i.e., United Rentals and SAF Holland go up and down completely randomly.
Pair Corralation between United Rentals and SAF Holland
Considering the 90-day investment horizon United Rentals is expected to generate 1.14 times more return on investment than SAF Holland. However, United Rentals is 1.14 times more volatile than SAF Holland SA. It trades about 0.09 of its potential returns per unit of risk. SAF Holland SA is currently generating about 0.06 per unit of risk. If you would invest 34,927 in United Rentals on September 5, 2024 and sell it today you would earn a total of 51,975 from holding United Rentals or generate 148.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.02% |
| Values | Daily Returns |
United Rentals vs. SAF Holland SA
Performance |
| Timeline |
| United Rentals |
| SAF Holland SA |
United Rentals and SAF Holland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and SAF Holland
The main advantage of trading using opposite United Rentals and SAF Holland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, SAF Holland 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 SAF Holland will offset losses from the drop in SAF Holland'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 |
| SAF Holland vs. Science Applications International | SAF Holland vs. INFORMATION SVC GRP | SAF Holland vs. DATANG INTL POW | SAF Holland vs. THORNEY TECHS LTD |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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