Correlation Between United Rentals and Packagingof America

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

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

Diversification Opportunities for United Rentals and Packagingof America

0.69

Correlation Coefficient

United Rentals  Packagingof America

Poor diversification

The 3 months correlation between United and Packagingof is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding United Rentals and Packaging of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Packagingof America 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 Packagingof America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Packagingof America has no effect on the direction of United Rentals i.e., United Rentals and Packagingof America go up and down completely randomly.

Pair Corralation between United Rentals and Packagingof America

Assuming the 90 days horizon United Rentals is expected to generate 1.25 times more return on investment than Packagingof America. However, United Rentals is 1.25 times more volatile than Packaging of. It trades about 0.23 of its potential returns per unit of risk. Packaging of is currently generating about 0.06 per unit of risk. If you would invest  51,570  in United Rentals on April 23, 2025 and sell it today you would earn a total of  17,610  from holding United Rentals or generate 34.15% 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.  Packaging of

United Rentals

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in United Rentals are ranked lower than 17 (%) 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.

Packagingof America

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Packaging of are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Packagingof America may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with United Rentals and Packagingof America

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

The idea behind United Rentals and Packaging of 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.