Correlation Between United Rentals and Altice

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

By analyzing existing cross correlation between United Rentals and Altice France 8125, you can compare the effects of market volatilities on United Rentals and Altice 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 Altice. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Altice.

Diversification Opportunities for United Rentals and Altice

-0.12

Correlation Coefficient

United Rentals  Altice

Good diversification

The 3 months correlation between United and Altice is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Altice France 8125 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altice France 8125 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 Altice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altice France 8125 has no effect on the direction of United Rentals i.e., United Rentals and Altice go up and down completely randomly.

Pair Corralation between United Rentals and Altice

Considering the 90-day investment horizon United Rentals is expected to under-perform the Altice. But the stock apears to be less risky and, when comparing its historical volatility, United Rentals is 1.36 times less risky than Altice. The stock trades about -0.22 of its potential returns per unit of risk. The Altice France 8125 is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  8,376  in Altice France 8125 on December 2, 2024 and sell it today you would lose (926.00) from holding Altice France 8125 or give up 11.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	86.89%
Values	Daily Returns

United Rentals  vs.  Altice France 8125

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.

Altice France 8125

Risk-Adjusted Performance

Solid

Over the last 90 days Altice France 8125 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for Altice France 8125 investors.

Pair Trading with United Rentals and Altice

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

The idea behind United Rentals and Altice France 8125 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.