Correlation Between United Rentals and Segall Bryant

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

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

Diversification Opportunities for United Rentals and Segall Bryant

-0.69

Correlation Coefficient

United Rentals  Segall Bryant

Excellent diversification

The 3 months correlation between United and Segall is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Segall Bryant Hamll in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Segall Bryant Hamll 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 Segall Bryant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Segall Bryant Hamll has no effect on the direction of United Rentals i.e., United Rentals and Segall Bryant go up and down completely randomly.

Pair Corralation between United Rentals and Segall Bryant

Considering the 90-day investment horizon United Rentals is expected to under-perform the Segall Bryant. In addition to that, United Rentals is 2.71 times more volatile than Segall Bryant Hamll. It trades about -0.05 of its total potential returns per unit of risk. Segall Bryant Hamll is currently generating about 0.25 per unit of volatility. If you would invest  1,020  in Segall Bryant Hamll on December 28, 2024 and sell it today you would earn a total of  136.00  from holding Segall Bryant Hamll or generate 13.33% return on investment over 90 days.

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

United Rentals  vs.  Segall Bryant Hamll

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.

Segall Bryant Hamll

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Segall Bryant Hamll are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Segall Bryant showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with United Rentals and Segall Bryant

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

The idea behind United Rentals and Segall Bryant Hamll 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.