Correlation Between United Rentals and Money Market
Can any of the company-specific risk be diversified away by investing in both United Rentals and Money Market 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 Money Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Money Market Obligations, you can compare the effects of market volatilities on United Rentals and Money Market 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 Money Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Money Market.
Diversification Opportunities for United Rentals and Money Market
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Money is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Money Market Obligations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Money Market Obligations 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 Money Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Money Market Obligations has no effect on the direction of United Rentals i.e., United Rentals and Money Market go up and down completely randomly.
Pair Corralation between United Rentals and Money Market
Considering the 90-day investment horizon United Rentals is expected to generate 14.69 times more return on investment than Money Market. However, United Rentals is 14.69 times more volatile than Money Market Obligations. It trades about 0.21 of its potential returns per unit of risk. Money Market Obligations is currently generating about 0.13 per unit of risk. If you would invest 67,982 in United Rentals on September 6, 2024 and sell it today you would earn a total of 18,842 from holding United Rentals or generate 27.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.44% |
Values | Daily Returns |
United Rentals vs. Money Market Obligations
Performance |
Timeline |
United Rentals |
Money Market Obligations |
United Rentals and Money Market Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with United Rentals and Money Market
The main advantage of trading using opposite United Rentals and Money Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Money Market 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 Money Market will offset losses from the drop in Money Market's 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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