Correlation Between United Rentals and SCHMID Group
Can any of the company-specific risk be diversified away by investing in both United Rentals and SCHMID Group 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 SCHMID Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and SCHMID Group NV, you can compare the effects of market volatilities on United Rentals and SCHMID Group 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 SCHMID Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and SCHMID Group.
Diversification Opportunities for United Rentals and SCHMID Group
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and SCHMID is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and SCHMID Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCHMID Group NV 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 SCHMID Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCHMID Group NV has no effect on the direction of United Rentals i.e., United Rentals and SCHMID Group go up and down completely randomly.
Pair Corralation between United Rentals and SCHMID Group
Considering the 90-day investment horizon United Rentals is expected to generate 5.46 times less return on investment than SCHMID Group. But when comparing it to its historical volatility, United Rentals is 8.2 times less risky than SCHMID Group. It trades about 0.11 of its potential returns per unit of risk. SCHMID Group NV is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 23.00 in SCHMID Group NV on September 2, 2024 and sell it today you would lose (3.00) from holding SCHMID Group NV or give up 13.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 37.37% |
| Values | Daily Returns |
United Rentals vs. SCHMID Group NV
Performance |
| Timeline |
| United Rentals |
| SCHMID Group NV |
United Rentals and SCHMID Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and SCHMID Group
The main advantage of trading using opposite United Rentals and SCHMID Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, SCHMID Group 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 SCHMID Group will offset losses from the drop in SCHMID Group'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 |
| SCHMID Group vs. NextNav Warrant | SCHMID Group vs. NETGEAR | SCHMID Group vs. Nike Inc | SCHMID Group vs. IPG Photonics |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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