Correlation Between United Rentals and Allianzgi Nfj

Can any of the company-specific risk be diversified away by investing in both United Rentals and Allianzgi Nfj 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 Allianzgi Nfj into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between United Rentals and Allianzgi Nfj International, you can compare the effects of market volatilities on United Rentals and Allianzgi Nfj 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 Allianzgi Nfj. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Allianzgi Nfj.

Diversification Opportunities for United Rentals and Allianzgi Nfj

0.21

Correlation Coefficient

United Rentals  Allianzgi Nfj

Modest diversification

The 3 months correlation between United and Allianzgi is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Allianzgi Nfj International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Nfj Intern 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 Allianzgi Nfj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Nfj Intern has no effect on the direction of United Rentals i.e., United Rentals and Allianzgi Nfj go up and down completely randomly.

Pair Corralation between United Rentals and Allianzgi Nfj

Considering the 90-day investment horizon United Rentals is expected to generate 2.38 times more return on investment than Allianzgi Nfj. However, United Rentals is 2.38 times more volatile than Allianzgi Nfj International. It trades about 0.09 of its potential returns per unit of risk. Allianzgi Nfj International is currently generating about 0.02 per unit of risk. If you would invest  35,864  in United Rentals on September 3, 2024 and sell it today you would earn a total of  50,736  from holding United Rentals or generate 141.47% 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.  Allianzgi Nfj International

United Rentals

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in United Rentals are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile basic indicators, United Rentals demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Allianzgi Nfj Intern

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Nfj International are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Allianzgi Nfj is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with United Rentals and Allianzgi Nfj

The main advantage of trading using opposite United Rentals and Allianzgi Nfj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Allianzgi Nfj 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 Allianzgi Nfj will offset losses from the drop in Allianzgi Nfj's long position.

The idea behind United Rentals and Allianzgi Nfj International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.