Correlation Between VALERO and United Rentals
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By analyzing existing cross correlation between VALERO ENERGY PORATION and United Rentals, you can compare the effects of market volatilities on VALERO and United Rentals 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 VALERO with a short position of United Rentals. Check out your portfolio center. Please also check ongoing floating volatility patterns of VALERO and United Rentals.
Diversification Opportunities for VALERO and United Rentals
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VALERO and United is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding VALERO ENERGY PORATION and United Rentals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Rentals and VALERO 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 VALERO ENERGY PORATION are associated (or correlated) with United Rentals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Rentals has no effect on the direction of VALERO i.e., VALERO and United Rentals go up and down completely randomly.
Pair Corralation between VALERO and United Rentals
Assuming the 90 days trading horizon VALERO ENERGY PORATION is expected to under-perform the United Rentals. But the bond apears to be less risky and, when comparing its historical volatility, VALERO ENERGY PORATION is 5.89 times less risky than United Rentals. The bond trades about -0.23 of its potential returns per unit of risk. The United Rentals is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 79,198 in United Rentals on September 2, 2024 and sell it today you would earn a total of 7,402 from holding United Rentals or generate 9.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.95% |
| Values | Daily Returns |
VALERO ENERGY PORATION vs. United Rentals
Performance |
| Timeline |
| VALERO ENERGY PORATION |
| United Rentals |
VALERO and United Rentals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VALERO and United Rentals
The main advantage of trading using opposite VALERO and United Rentals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VALERO position performs unexpectedly, United Rentals 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 United Rentals will offset losses from the drop in United Rentals' long position.| VALERO vs. Harmony Gold Mining | VALERO vs. Dine Brands Global | VALERO vs. Chemours Co | VALERO vs. Flexible Solutions International |
| United Rentals vs. HE Equipment Services | United Rentals vs. GATX Corporation | United Rentals vs. McGrath RentCorp | United Rentals vs. Alta Equipment Group |
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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