Correlation Between Ashtead Gro and U Haul

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

By analyzing existing cross correlation between Ashtead Gro and U Haul Holding, you can compare the effects of market volatilities on Ashtead Gro and U Haul 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 Ashtead Gro with a short position of U Haul. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashtead Gro and U Haul.

Diversification Opportunities for Ashtead Gro and U Haul

-0.39

Correlation Coefficient

Ashtead Gro  U Haul

Very good diversification

The 3 months correlation between Ashtead and UHAL-B is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Ashtead Gro and U Haul Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U Haul Holding and Ashtead Gro 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 Ashtead Gro are associated (or correlated) with U Haul. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U Haul Holding has no effect on the direction of Ashtead Gro i.e., Ashtead Gro and U Haul go up and down completely randomly.

Pair Corralation between Ashtead Gro and U Haul

Assuming the 90 days horizon Ashtead Gro is expected to under-perform the U Haul. In addition to that, Ashtead Gro is 1.54 times more volatile than U Haul Holding. It trades about -0.02 of its total potential returns per unit of risk. U Haul Holding is currently generating about -0.01 per unit of volatility. If you would invest  6,853  in U Haul Holding on September 13, 2024 and sell it today you would lose (154.00) from holding U Haul Holding or give up 2.25% of portfolio value over 90 days.

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

Ashtead Gro  vs.  U Haul Holding

Ashtead Gro

Risk-Adjusted Performance

0 of 100

Very Weak

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

U Haul Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days U Haul Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, U Haul is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ashtead Gro and U Haul

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

The idea behind Ashtead Gro and U Haul Holding 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .