Correlation Between United Rentals and God Bless
Can any of the company-specific risk be diversified away by investing in both United Rentals and God Bless 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 God Bless into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and God Bless America, you can compare the effects of market volatilities on United Rentals and God Bless 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 God Bless. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and God Bless.
Diversification Opportunities for United Rentals and God Bless
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between United and God is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and God Bless America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on God Bless America 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 God Bless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of God Bless America has no effect on the direction of United Rentals i.e., United Rentals and God Bless go up and down completely randomly.
Pair Corralation between United Rentals and God Bless
Considering the 90-day investment horizon United Rentals is expected to generate 2.3 times more return on investment than God Bless. However, United Rentals is 2.3 times more volatile than God Bless America. It trades about 0.14 of its potential returns per unit of risk. God Bless America is currently generating about 0.3 per unit of risk. If you would invest 79,650 in United Rentals on September 6, 2024 and sell it today you would earn a total of 5,849 from holding United Rentals or generate 7.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Rentals vs. God Bless America
Performance |
| Timeline |
| United Rentals |
| God Bless America |
United Rentals and God Bless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and God Bless
The main advantage of trading using opposite United Rentals and God Bless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, God Bless 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 God Bless will offset losses from the drop in God Bless' long position.| United Rentals vs. HE Equipment Services | United Rentals vs. GATX Corporation | United Rentals vs. McGrath RentCorp | United Rentals vs. Alta Equipment Group |
| God Bless vs. Point Bridge GOP | God Bless vs. EA Series Trust | God Bless vs. EA Series Trust | God Bless vs. ETF Opportunities Trust |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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