Correlation Between United Rentals and Garo AB
Can any of the company-specific risk be diversified away by investing in both United Rentals and Garo AB 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 Garo AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Garo AB, you can compare the effects of market volatilities on United Rentals and Garo AB 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 Garo AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Garo AB.
Diversification Opportunities for United Rentals and Garo AB
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between United and Garo is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Garo AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garo AB 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 Garo AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garo AB has no effect on the direction of United Rentals i.e., United Rentals and Garo AB go up and down completely randomly.
Pair Corralation between United Rentals and Garo AB
Considering the 90-day investment horizon United Rentals is expected to generate 0.95 times more return on investment than Garo AB. However, United Rentals is 1.05 times less risky than Garo AB. It trades about -0.07 of its potential returns per unit of risk. Garo AB is currently generating about -0.08 per unit of risk. If you would invest 70,431 in United Rentals on December 28, 2024 and sell it today you would lose (7,666) from holding United Rentals or give up 10.88% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
United Rentals vs. Garo AB
Performance |
Timeline |
United Rentals |
Garo AB |
United Rentals and Garo AB Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with United Rentals and Garo AB
The main advantage of trading using opposite United Rentals and Garo AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Garo AB 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 Garo AB will offset losses from the drop in Garo AB's long position.United Rentals vs. HE Equipment Services | United Rentals vs. GATX Corporation | United Rentals vs. McGrath RentCorp | United Rentals vs. Alta Equipment Group |
Garo AB vs. Troax Group AB | Garo AB vs. NIBE Industrier AB | Garo AB vs. Hexatronic Group AB | Garo AB vs. Bufab Holding AB |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |