Correlation Between United Rentals and Sany Heavy
Can any of the company-specific risk be diversified away by investing in both United Rentals and Sany Heavy 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 Sany Heavy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Sany Heavy Equipment, you can compare the effects of market volatilities on United Rentals and Sany Heavy 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 Sany Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Sany Heavy.
Diversification Opportunities for United Rentals and Sany Heavy
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Sany is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Sany Heavy Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sany Heavy Equipment 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 Sany Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sany Heavy Equipment has no effect on the direction of United Rentals i.e., United Rentals and Sany Heavy go up and down completely randomly.
Pair Corralation between United Rentals and Sany Heavy
Considering the 90-day investment horizon United Rentals is expected to generate 0.53 times more return on investment than Sany Heavy. However, United Rentals is 1.9 times less risky than Sany Heavy. It trades about 0.11 of its potential returns per unit of risk. Sany Heavy Equipment is currently generating about 0.01 per unit of risk. If you would invest 49,060 in United Rentals on September 3, 2024 and sell it today you would earn a total of 37,540 from holding United Rentals or generate 76.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
United Rentals vs. Sany Heavy Equipment
Performance |
| Timeline |
| United Rentals |
| Sany Heavy Equipment |
United Rentals and Sany Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Sany Heavy
The main advantage of trading using opposite United Rentals and Sany Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Sany Heavy 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 Sany Heavy will offset losses from the drop in Sany Heavy'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 |
| Sany Heavy vs. United Rentals | Sany Heavy vs. SHIP HEALTHCARE HLDGINC | Sany Heavy vs. Air Lease | Sany Heavy vs. DXC Technology Co |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Transaction History View history of all your transactions and understand their impact on performance |