Correlation Between United Rentals and Aberdeen International

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

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

Diversification Opportunities for United Rentals and Aberdeen International

0.59

Correlation Coefficient

United Rentals  Aberdeen International

Very weak diversification

The 3 months correlation between United and Aberdeen is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Aberdeen International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen International 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 Aberdeen International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen International has no effect on the direction of United Rentals i.e., United Rentals and Aberdeen International go up and down completely randomly.

Pair Corralation between United Rentals and Aberdeen International

If you would invest  4.00  in Aberdeen International on December 2, 2024 and sell it today you would lose (2.00) from holding Aberdeen International or give up 50.0% of portfolio value over 90 days.

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

United Rentals  vs.  Aberdeen International

United Rentals

Risk-Adjusted Performance

Very Weak

Over the last 90 days United Rentals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Aberdeen International

Risk-Adjusted Performance

Very Weak

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

Pair Trading with United Rentals and Aberdeen International

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

The idea behind United Rentals and Aberdeen 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.