Correlation Between United Rentals and Loomis Sayles
Can any of the company-specific risk be diversified away by investing in both United Rentals and Loomis Sayles 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 Loomis Sayles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Loomis Sayles Limited, you can compare the effects of market volatilities on United Rentals and Loomis Sayles 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 Loomis Sayles. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Loomis Sayles.
Diversification Opportunities for United Rentals and Loomis Sayles
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and Loomis is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Loomis Sayles Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loomis Sayles Limited 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 Loomis Sayles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loomis Sayles Limited has no effect on the direction of United Rentals i.e., United Rentals and Loomis Sayles go up and down completely randomly.
Pair Corralation between United Rentals and Loomis Sayles
Considering the 90-day investment horizon United Rentals is expected to generate 15.33 times more return on investment than Loomis Sayles. However, United Rentals is 15.33 times more volatile than Loomis Sayles Limited. It trades about 0.1 of its potential returns per unit of risk. Loomis Sayles Limited is currently generating about -0.06 per unit of risk. If you would invest 71,129 in United Rentals on September 12, 2024 and sell it today you would earn a total of 8,473 from holding United Rentals or generate 11.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 98.44% |
Values | Daily Returns |
United Rentals vs. Loomis Sayles Limited
Performance |
Timeline |
United Rentals |
Loomis Sayles Limited |
United Rentals and Loomis Sayles Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with United Rentals and Loomis Sayles
The main advantage of trading using opposite United Rentals and Loomis Sayles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Loomis Sayles 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 Loomis Sayles will offset losses from the drop in Loomis Sayles' long position.United Rentals vs. HE Equipment Services | United Rentals vs. GATX Corporation | United Rentals vs. McGrath RentCorp | United Rentals vs. Alta Equipment Group |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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