Correlation Between United Rentals and Calvert Global

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

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

Diversification Opportunities for United Rentals and Calvert Global

0.71

Correlation Coefficient

United Rentals  Calvert Global

Poor diversification

The 3 months correlation between United and Calvert is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Calvert Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Global Equity 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 Calvert Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Global Equity has no effect on the direction of United Rentals i.e., United Rentals and Calvert Global go up and down completely randomly.

Pair Corralation between United Rentals and Calvert Global

Considering the 90-day investment horizon United Rentals is expected to under-perform the Calvert Global. In addition to that, United Rentals is 2.54 times more volatile than Calvert Global Equity. It trades about -0.07 of its total potential returns per unit of risk. Calvert Global Equity is currently generating about -0.02 per unit of volatility. If you would invest  1,663  in Calvert Global Equity on December 28, 2024 and sell it today you would lose (25.00) from holding Calvert Global Equity or give up 1.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

United Rentals  vs.  Calvert Global Equity

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 latest uncertain performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Calvert Global Equity

Risk-Adjusted Performance

Very Weak

Over the last 90 days Calvert Global Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Calvert Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with United Rentals and Calvert Global

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

The idea behind United Rentals and Calvert Global Equity 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.