Correlation Between United Rentals and Tiaa-cref Lifestyle

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

By analyzing existing cross correlation between United Rentals and Tiaa Cref Lifestyle Aggressive, you can compare the effects of market volatilities on United Rentals and Tiaa-cref Lifestyle 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 Tiaa-cref Lifestyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Tiaa-cref Lifestyle.

Diversification Opportunities for United Rentals and Tiaa-cref Lifestyle

0.48

Correlation Coefficient

United Rentals  Tiaa-cref Lifestyle

Very weak diversification

The 3 months correlation between United and Tiaa-cref is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Tiaa Cref Lifestyle Aggressive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Lifestyle 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 Tiaa-cref Lifestyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tiaa Cref Lifestyle has no effect on the direction of United Rentals i.e., United Rentals and Tiaa-cref Lifestyle go up and down completely randomly.

Pair Corralation between United Rentals and Tiaa-cref Lifestyle

Considering the 90-day investment horizon United Rentals is expected to under-perform the Tiaa-cref Lifestyle. In addition to that, United Rentals is 2.71 times more volatile than Tiaa Cref Lifestyle Aggressive. It trades about -0.07 of its total potential returns per unit of risk. Tiaa Cref Lifestyle Aggressive is currently generating about 0.08 per unit of volatility. If you would invest  1,985  in Tiaa Cref Lifestyle Aggressive on December 3, 2024 and sell it today you would earn a total of  49.00  from holding Tiaa Cref Lifestyle Aggressive or generate 2.47% return on investment over 90 days.

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

United Rentals  vs.  Tiaa Cref Lifestyle Aggressive

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.

Tiaa Cref Lifestyle

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tiaa Cref Lifestyle Aggressive has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Tiaa-cref Lifestyle 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 Tiaa-cref Lifestyle

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

The idea behind United Rentals and Tiaa Cref Lifestyle Aggressive 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.