Correlation Between United Rentals and Gabelli Dividend

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

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

Diversification Opportunities for United Rentals and Gabelli Dividend

0.88

Correlation Coefficient

United Rentals  Gabelli Dividend

Very poor diversification

The 3 months correlation between United and Gabelli is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and The Gabelli Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Dividend 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 Gabelli Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Dividend has no effect on the direction of United Rentals i.e., United Rentals and Gabelli Dividend go up and down completely randomly.

Pair Corralation between United Rentals and Gabelli Dividend

Considering the 90-day investment horizon United Rentals is expected to under-perform the Gabelli Dividend. In addition to that, United Rentals is 3.49 times more volatile than The Gabelli Dividend. It trades about -0.25 of its total potential returns per unit of risk. The Gabelli Dividend is currently generating about 0.0 per unit of volatility. If you would invest  1,972  in The Gabelli Dividend on September 12, 2024 and sell it today you would lose (1.00) from holding The Gabelli Dividend or give up 0.05% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

United Rentals  vs.  The Gabelli Dividend

United Rentals

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in United Rentals are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, United Rentals may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Gabelli Dividend

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Gabelli Dividend are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental drivers, Gabelli Dividend may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with United Rentals and Gabelli Dividend

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

The idea behind United Rentals and The Gabelli Dividend 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.