Correlation Between UNITED RENTALS and Vinci S

Can any of the company-specific risk be diversified away by investing in both UNITED RENTALS and Vinci S 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 Vinci S into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between UNITED RENTALS and Vinci S A, you can compare the effects of market volatilities on UNITED RENTALS and Vinci S 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 Vinci S. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNITED RENTALS and Vinci S.

Diversification Opportunities for UNITED RENTALS and Vinci S

-0.05

Correlation Coefficient

UNITED RENTALS  Vinci S

Good diversification

The 3 months correlation between UNITED and Vinci is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding UNITED RENTALS and Vinci S A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vinci S A 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 Vinci S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vinci S A has no effect on the direction of UNITED RENTALS i.e., UNITED RENTALS and Vinci S go up and down completely randomly.

Pair Corralation between UNITED RENTALS and Vinci S

Assuming the 90 days trading horizon UNITED RENTALS is expected to under-perform the Vinci S. In addition to that, UNITED RENTALS is 2.05 times more volatile than Vinci S A. It trades about -0.81 of its total potential returns per unit of risk. Vinci S A is currently generating about 0.0 per unit of volatility. If you would invest  10,140  in Vinci S A on October 10, 2024 and sell it today you would lose (10.00) from holding Vinci S A or give up 0.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

UNITED RENTALS  vs.  Vinci S A

UNITED RENTALS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UNITED RENTALS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Vinci S A

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vinci S A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Vinci S is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with UNITED RENTALS and Vinci S

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

The idea behind UNITED RENTALS and Vinci S A 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.