Correlation Between United Rentals and Intertech

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

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

Diversification Opportunities for United Rentals and Intertech

-0.71

Correlation Coefficient

United Rentals  Intertech

Pay attention - limited upside

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

Pair Corralation between United Rentals and Intertech

Considering the 90-day investment horizon United Rentals is expected to under-perform the Intertech. In addition to that, United Rentals is 1.0 times more volatile than Intertech SA Inter. It trades about -0.22 of its total potential returns per unit of risk. Intertech SA Inter is currently generating about 0.15 per unit of volatility. If you would invest  105.00  in Intertech SA Inter on December 2, 2024 and sell it today you would earn a total of  20.00  from holding Intertech SA Inter or generate 19.05% 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.  Intertech SA Inter

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.

Intertech SA Inter

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Intertech SA Inter are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Intertech sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with United Rentals and Intertech

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

The idea behind United Rentals and Intertech SA Inter 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.