Correlation Between Baldwin Insurance and U Haul

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

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

Diversification Opportunities for Baldwin Insurance and U Haul

0.24

Correlation Coefficient

Baldwin Insurance  U Haul

Modest diversification

The 3 months correlation between Baldwin and UHAL is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding The Baldwin Insurance 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 Baldwin Insurance 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 The Baldwin Insurance 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 Baldwin Insurance i.e., Baldwin Insurance and U Haul go up and down completely randomly.

Pair Corralation between Baldwin Insurance and U Haul

Given the investment horizon of 90 days The Baldwin Insurance is expected to generate 1.41 times more return on investment than U Haul. However, Baldwin Insurance is 1.41 times more volatile than U Haul Holding. It trades about 0.05 of its potential returns per unit of risk. U Haul Holding is currently generating about 0.02 per unit of risk. If you would invest  2,514  in The Baldwin Insurance on September 20, 2024 and sell it today you would earn a total of  1,434  from holding The Baldwin Insurance or generate 57.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

The Baldwin Insurance  vs.  U Haul Holding

Baldwin Insurance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Baldwin Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm 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 latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Baldwin Insurance and U Haul

The main advantage of trading using opposite Baldwin Insurance and U Haul positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baldwin Insurance 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 The Baldwin Insurance 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.