Correlation Between United Rentals and Crédit Agricole
Can any of the company-specific risk be diversified away by investing in both United Rentals and Crédit Agricole 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 Crédit Agricole into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Crdit Agricole SA, you can compare the effects of market volatilities on United Rentals and Crédit Agricole 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 Crédit Agricole. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Crédit Agricole.
Diversification Opportunities for United Rentals and Crédit Agricole
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and Crédit is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Crdit Agricole SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crdit Agricole 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 Crédit Agricole. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crdit Agricole SA has no effect on the direction of United Rentals i.e., United Rentals and Crédit Agricole go up and down completely randomly.
Pair Corralation between United Rentals and Crédit Agricole
Considering the 90-day investment horizon United Rentals is expected to generate 1.48 times more return on investment than Crédit Agricole. However, United Rentals is 1.48 times more volatile than Crdit Agricole SA. It trades about 0.2 of its potential returns per unit of risk. Crdit Agricole SA is currently generating about -0.32 per unit of risk. If you would invest 78,451 in United Rentals on September 3, 2024 and sell it today you would earn a total of 8,149 from holding United Rentals or generate 10.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
United Rentals vs. Crdit Agricole SA
Performance |
| Timeline |
| United Rentals |
| Crdit Agricole SA |
United Rentals and Crédit Agricole Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Crédit Agricole
The main advantage of trading using opposite United Rentals and Crédit Agricole positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Crédit Agricole 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 Crédit Agricole will offset losses from the drop in Crédit Agricole's long position.| United Rentals vs. Alta Equipment Group | United Rentals vs. McGrath RentCorp | United Rentals vs. Herc Holdings | United Rentals vs. HE Equipment Services |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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