Correlation Between United Rentals and SBA Communications

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

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

Diversification Opportunities for United Rentals and SBA Communications

-0.37

Correlation Coefficient

United Rentals  SBA Communications

Very good diversification

The 3 months correlation between United and SBA is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and SBA Communications Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBA Communications Corp 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 SBA Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBA Communications Corp has no effect on the direction of United Rentals i.e., United Rentals and SBA Communications go up and down completely randomly.

Pair Corralation between United Rentals and SBA Communications

Assuming the 90 days horizon United Rentals is expected to generate 1.72 times more return on investment than SBA Communications. However, United Rentals is 1.72 times more volatile than SBA Communications Corp. It trades about 0.2 of its potential returns per unit of risk. SBA Communications Corp is currently generating about -0.07 per unit of risk. If you would invest  57,136  in United Rentals on May 7, 2025 and sell it today you would earn a total of  17,224  from holding United Rentals or generate 30.15% return on investment over 90 days.

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

United Rentals  vs.  SBA Communications Corp

United Rentals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in United Rentals are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, United Rentals reported solid returns over the last few months and may actually be approaching a breakup point.

SBA Communications Corp

Risk-Adjusted Performance

Weakest

Over the last 90 days SBA Communications Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, SBA Communications is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with United Rentals and SBA Communications

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

The idea behind United Rentals and SBA Communications Corp 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 Transaction History module to view history of all your transactions and understand their impact on performance.