Correlation Between United Rentals and Trailblazer Merger
Can any of the company-specific risk be diversified away by investing in both United Rentals and Trailblazer Merger 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 Trailblazer Merger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Trailblazer Merger, you can compare the effects of market volatilities on United Rentals and Trailblazer Merger 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 Trailblazer Merger. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Trailblazer Merger.
Diversification Opportunities for United Rentals and Trailblazer Merger
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between United and Trailblazer is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Trailblazer Merger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trailblazer Merger 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 Trailblazer Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trailblazer Merger has no effect on the direction of United Rentals i.e., United Rentals and Trailblazer Merger go up and down completely randomly.
Pair Corralation between United Rentals and Trailblazer Merger
Considering the 90-day investment horizon United Rentals is expected to generate 7.58 times less return on investment than Trailblazer Merger. But when comparing it to its historical volatility, United Rentals is 7.79 times less risky than Trailblazer Merger. It trades about 0.09 of its potential returns per unit of risk. Trailblazer Merger is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 16.00 in Trailblazer Merger on September 12, 2024 and sell it today you would earn a total of 7.00 from holding Trailblazer Merger or generate 43.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Rentals vs. Trailblazer Merger
Performance |
| Timeline |
| United Rentals |
| Trailblazer Merger |
United Rentals and Trailblazer Merger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Trailblazer Merger
The main advantage of trading using opposite United Rentals and Trailblazer Merger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Trailblazer Merger 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 Trailblazer Merger will offset losses from the drop in Trailblazer Merger'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 |
| Trailblazer Merger vs. United Rentals | Trailblazer Merger vs. Fortress Transp Infra | Trailblazer Merger vs. China Aircraft Leasing | Trailblazer Merger vs. Willscot Mobile Mini |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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