Correlation Between United Rentals and 606822CB8

Can any of the company-specific risk be diversified away by investing in both United Rentals and 606822CB8 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 606822CB8 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between United Rentals and MUFG 2494 13 OCT 32, you can compare the effects of market volatilities on United Rentals and 606822CB8 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 606822CB8. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and 606822CB8.

Diversification Opportunities for United Rentals and 606822CB8

0.04

Correlation Coefficient

United Rentals  606822CB8

Significant diversification

The 3 months correlation between United and 606822CB8 is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and MUFG 2494 13 OCT 32 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MUFG 2494 13 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 606822CB8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MUFG 2494 13 has no effect on the direction of United Rentals i.e., United Rentals and 606822CB8 go up and down completely randomly.

Pair Corralation between United Rentals and 606822CB8

Considering the 90-day investment horizon United Rentals is expected to generate 2.18 times more return on investment than 606822CB8. However, United Rentals is 2.18 times more volatile than MUFG 2494 13 OCT 32. It trades about 0.09 of its potential returns per unit of risk. MUFG 2494 13 OCT 32 is currently generating about 0.01 per unit of risk. If you would invest  35,974  in United Rentals on September 4, 2024 and sell it today you would earn a total of  49,731  from holding United Rentals or generate 138.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	51.92%
Values	Daily Returns

United Rentals  vs.  MUFG 2494 13 OCT 32

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 uncertain basic indicators, United Rentals demonstrated solid returns over the last few months and may actually be approaching a breakup point.

MUFG 2494 13

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MUFG 2494 13 OCT 32 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for MUFG 2494 13 OCT 32 investors.

Pair Trading with United Rentals and 606822CB8

The main advantage of trading using opposite United Rentals and 606822CB8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, 606822CB8 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 606822CB8 will offset losses from the drop in 606822CB8's long position.

The idea behind United Rentals and MUFG 2494 13 OCT 32 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.