Correlation Between United Rentals and Nationwide Allianzgi

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

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

Diversification Opportunities for United Rentals and Nationwide Allianzgi

-0.3

Correlation Coefficient

United Rentals  Nationwide Allianzgi

Very good diversification

The 3 months correlation between United and Nationwide is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Nationwide Allianzgi Internati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Allianzgi 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 Nationwide Allianzgi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Allianzgi has no effect on the direction of United Rentals i.e., United Rentals and Nationwide Allianzgi go up and down completely randomly.

Pair Corralation between United Rentals and Nationwide Allianzgi

Considering the 90-day investment horizon United Rentals is expected to generate 2.13 times more return on investment than Nationwide Allianzgi. However, United Rentals is 2.13 times more volatile than Nationwide Allianzgi International. It trades about 0.18 of its potential returns per unit of risk. Nationwide Allianzgi International is currently generating about -0.05 per unit of risk. If you would invest  70,053  in United Rentals on September 3, 2024 and sell it today you would earn a total of  15,652  from holding United Rentals or generate 22.34% return on investment over 90 days.

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

United Rentals  vs.  Nationwide Allianzgi Internati

United Rentals

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in United Rentals are ranked lower than 13 (%) 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.

Nationwide Allianzgi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nationwide Allianzgi International has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical indicators, Nationwide Allianzgi 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 Nationwide Allianzgi

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

The idea behind United Rentals and Nationwide Allianzgi 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.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.