Correlation Between United Rentals and Catalyst Exceed

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

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

Diversification Opportunities for United Rentals and Catalyst Exceed

-0.02

Correlation Coefficient

United Rentals  Catalyst Exceed

Good diversification

The 3 months correlation between United and Catalyst is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Catalyst Exceed Defined in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Exceed Defined 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 Catalyst Exceed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Exceed Defined has no effect on the direction of United Rentals i.e., United Rentals and Catalyst Exceed go up and down completely randomly.

Pair Corralation between United Rentals and Catalyst Exceed

Considering the 90-day investment horizon United Rentals is expected to generate 2.73 times more return on investment than Catalyst Exceed. However, United Rentals is 2.73 times more volatile than Catalyst Exceed Defined. It trades about 0.05 of its potential returns per unit of risk. Catalyst Exceed Defined is currently generating about 0.09 per unit of risk. If you would invest  39,919  in United Rentals on December 2, 2024 and sell it today you would earn a total of  24,313  from holding United Rentals or generate 60.91% return on investment over 90 days.

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

United Rentals  vs.  Catalyst Exceed Defined

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.

Catalyst Exceed Defined

Risk-Adjusted Performance

Very Weak

Over the last 90 days Catalyst Exceed Defined has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Catalyst Exceed 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 Catalyst Exceed

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

The idea behind United Rentals and Catalyst Exceed Defined 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.