Correlation Between United Rentals and ACNB

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

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

Diversification Opportunities for United Rentals and ACNB

0.73

Correlation Coefficient

United Rentals  ACNB

Poor diversification

The 3 months correlation between United and ACNB is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and ACNB Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACNB 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 ACNB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACNB has no effect on the direction of United Rentals i.e., United Rentals and ACNB go up and down completely randomly.

Pair Corralation between United Rentals and ACNB

Considering the 90-day investment horizon United Rentals is expected to under-perform the ACNB. In addition to that, United Rentals is 2.13 times more volatile than ACNB Corporation. It trades about -0.38 of its total potential returns per unit of risk. ACNB Corporation is currently generating about 0.03 per unit of volatility. If you would invest  4,078  in ACNB Corporation on December 2, 2024 and sell it today you would earn a total of  19.00  from holding ACNB Corporation or generate 0.47% return on investment over 90 days.

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

United Rentals  vs.  ACNB Corp.

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.

ACNB

Risk-Adjusted Performance

Very Weak

Over the last 90 days ACNB Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with United Rentals and ACNB

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

The idea behind United Rentals and ACNB Corporation 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.