Correlation Between United Rentals and Barloworld
Can any of the company-specific risk be diversified away by investing in both United Rentals and Barloworld 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 Barloworld into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Rentals and Barloworld Ltd ADR, you can compare the effects of market volatilities on United Rentals and Barloworld 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 Barloworld. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Rentals and Barloworld.
Diversification Opportunities for United Rentals and Barloworld
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Barloworld is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Barloworld Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barloworld ADR 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 Barloworld. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barloworld ADR has no effect on the direction of United Rentals i.e., United Rentals and Barloworld go up and down completely randomly.
Pair Corralation between United Rentals and Barloworld
Considering the 90-day investment horizon United Rentals is expected to generate 1.97 times less return on investment than Barloworld. But when comparing it to its historical volatility, United Rentals is 2.28 times less risky than Barloworld. It trades about 0.06 of its potential returns per unit of risk. Barloworld Ltd ADR is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 455.00 in Barloworld Ltd ADR on May 2, 2025 and sell it today you would earn a total of 133.00 from holding Barloworld Ltd ADR or generate 29.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 57.64% |
| Values | Daily Returns |
United Rentals vs. Barloworld Ltd ADR
Performance |
| Timeline |
| United Rentals |
| Barloworld ADR |
United Rentals and Barloworld Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Rentals and Barloworld
The main advantage of trading using opposite United Rentals and Barloworld positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Rentals position performs unexpectedly, Barloworld 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 Barloworld will offset losses from the drop in Barloworld's long position.| United Rentals vs. Herc Holdings | United Rentals vs. Avis Budget Group | United Rentals vs. Ryder System | United Rentals vs. U Haul Holding |
| Barloworld vs. Hertz Global Holdings | Barloworld vs. United Rentals | Barloworld vs. Ryder System | Barloworld vs. Herc Holdings |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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