Correlation Between Vestis and United Rentals
Can any of the company-specific risk be diversified away by investing in both Vestis and United Rentals 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 Vestis and United Rentals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vestis and United Rentals, you can compare the effects of market volatilities on Vestis and United Rentals 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 Vestis with a short position of United Rentals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vestis and United Rentals.
Diversification Opportunities for Vestis and United Rentals
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Vestis and United is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Vestis and United Rentals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Rentals and Vestis 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 Vestis are associated (or correlated) with United Rentals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Rentals has no effect on the direction of Vestis i.e., Vestis and United Rentals go up and down completely randomly.
Pair Corralation between Vestis and United Rentals
Given the investment horizon of 90 days Vestis is expected to generate 6.56 times less return on investment than United Rentals. In addition to that, Vestis is 1.66 times more volatile than United Rentals. It trades about 0.01 of its total potential returns per unit of risk. United Rentals is currently generating about 0.09 per unit of volatility. If you would invest 35,864 in United Rentals on September 3, 2024 and sell it today you would earn a total of 50,736 from holding United Rentals or generate 141.47% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 60.2% |
Values | Daily Returns |
Vestis vs. United Rentals
Performance |
Timeline |
Vestis |
United Rentals |
Vestis and United Rentals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Vestis and United Rentals
The main advantage of trading using opposite Vestis and United Rentals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vestis position performs unexpectedly, United Rentals 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 United Rentals will offset losses from the drop in United Rentals' long position.Vestis vs. Celsius Holdings | Vestis vs. Eldorado Gold Corp | Vestis vs. Cementos Pacasmayo SAA | Vestis vs. IPG Photonics |
United Rentals vs. Alta Equipment Group | United Rentals vs. McGrath RentCorp | United Rentals vs. Herc Holdings | United Rentals vs. HE Equipment Services |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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