Correlation Between United Rentals and CI Gold

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

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

Diversification Opportunities for United Rentals and CI Gold

-0.52

Correlation Coefficient

United Rentals  CI Gold

Excellent diversification

The 3 months correlation between United and CGXF is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and CI Gold Giants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Gold Giants 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 CI Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Gold Giants has no effect on the direction of United Rentals i.e., United Rentals and CI Gold go up and down completely randomly.

Pair Corralation between United Rentals and CI Gold

Considering the 90-day investment horizon United Rentals is expected to under-perform the CI Gold. In addition to that, United Rentals is 1.67 times more volatile than CI Gold Giants. It trades about -0.07 of its total potential returns per unit of risk. CI Gold Giants is currently generating about 0.34 per unit of volatility. If you would invest  990.00  in CI Gold Giants on December 28, 2024 and sell it today you would earn a total of  336.00  from holding CI Gold Giants or generate 33.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

United Rentals  vs.  CI Gold Giants

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.

CI Gold Giants

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in CI Gold Giants are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, CI Gold displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with United Rentals and CI Gold

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

The idea behind United Rentals and CI Gold Giants 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.