Correlation Between United Rentals and Yayyo

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

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

Diversification Opportunities for United Rentals and Yayyo

-0.65

Correlation Coefficient

United Rentals  Yayyo

Excellent diversification

The 3 months correlation between United and Yayyo is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Yayyo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yayyo Inc 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 Yayyo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yayyo Inc has no effect on the direction of United Rentals i.e., United Rentals and Yayyo go up and down completely randomly.

Pair Corralation between United Rentals and Yayyo

If you would invest  72,064  in United Rentals on August 15, 2024 and sell it today you would earn a total of  14,772  from holding United Rentals or generate 20.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

United Rentals  vs.  Yayyo Inc

United Rentals

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in United Rentals are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile basic indicators, United Rentals demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Yayyo Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yayyo Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Yayyo is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with United Rentals and Yayyo

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

The idea behind United Rentals and Yayyo Inc 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.