Correlation Between United Rentals and Zebra Technologies
Can any of the company-specific risk be diversified away by investing in both United Rentals and Zebra Technologies 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 Zebra Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Zebra Technologies, you can compare the effects of market volatilities on United Rentals and Zebra Technologies 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 Zebra Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Zebra Technologies.
Diversification Opportunities for United Rentals and Zebra Technologies
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Zebra is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Zebra Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zebra Technologies 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 Zebra Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zebra Technologies has no effect on the direction of United Rentals i.e., United Rentals and Zebra Technologies go up and down completely randomly.
Pair Corralation between United Rentals and Zebra Technologies
Considering the 90-day investment horizon United Rentals is expected to generate 0.89 times more return on investment than Zebra Technologies. However, United Rentals is 1.13 times less risky than Zebra Technologies. It trades about 0.08 of its potential returns per unit of risk. Zebra Technologies is currently generating about 0.0 per unit of risk. If you would invest 29,062 in United Rentals on January 26, 2024 and sell it today you would earn a total of 36,457 from holding United Rentals or generate 125.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
United Rentals vs. Zebra Technologies
Performance |
Timeline |
United Rentals |
Zebra Technologies |
United Rentals and Zebra Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with United Rentals and Zebra Technologies
The main advantage of trading using opposite United Rentals and Zebra Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Zebra Technologies 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 Zebra Technologies will offset losses from the drop in Zebra Technologies' long position.United Rentals vs. Ryder System | United Rentals vs. Vestis | United Rentals vs. Willis Lease Finance | United Rentals vs. AerCap Holdings NV |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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