Correlation Between United Rentals and Nationwide Fund

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

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

Diversification Opportunities for United Rentals and Nationwide Fund

0.81

Correlation Coefficient

United Rentals  Nationwide Fund

Very poor diversification

The 3 months correlation between United and Nationwide is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Nationwide Fund Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Fund Inst 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 Nationwide Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Fund Inst has no effect on the direction of United Rentals i.e., United Rentals and Nationwide Fund go up and down completely randomly.

Pair Corralation between United Rentals and Nationwide Fund

Considering the 90-day investment horizon United Rentals is expected to under-perform the Nationwide Fund. In addition to that, United Rentals is 2.68 times more volatile than Nationwide Fund Institutional. It trades about -0.38 of its total potential returns per unit of risk. Nationwide Fund Institutional is currently generating about -0.21 per unit of volatility. If you would invest  3,162  in Nationwide Fund Institutional on December 2, 2024 and sell it today you would lose (107.00) from holding Nationwide Fund Institutional or give up 3.38% of portfolio value over 90 days.

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

United Rentals  vs.  Nationwide Fund Institutional

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.

Nationwide Fund Inst

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nationwide Fund Institutional has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with United Rentals and Nationwide Fund

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

The idea behind United Rentals and Nationwide Fund Institutional 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.