Correlation Between Custom Truck and U Haul

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

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

Diversification Opportunities for Custom Truck and U Haul

-0.35

Correlation Coefficient

Custom Truck  U Haul

Very good diversification

The 3 months correlation between Custom and UHAL is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Custom Truck One 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 Custom Truck 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 Custom Truck One 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 Custom Truck i.e., Custom Truck and U Haul go up and down completely randomly.

Pair Corralation between Custom Truck and U Haul

Given the investment horizon of 90 days Custom Truck One is expected to generate 2.41 times more return on investment than U Haul. However, Custom Truck is 2.41 times more volatile than U Haul Holding. It trades about 0.19 of its potential returns per unit of risk. U Haul Holding is currently generating about 0.06 per unit of risk. If you would invest  356.00  in Custom Truck One on September 12, 2024 and sell it today you would earn a total of  174.00  from holding Custom Truck One or generate 48.88% return on investment over 90 days.

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

Custom Truck One  vs.  U Haul Holding

Custom Truck One

Risk-Adjusted Performance

14 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Custom Truck One are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Custom Truck unveiled solid returns over the last few months and may actually be approaching a breakup point.

U Haul Holding

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in U Haul Holding are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, U Haul is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Custom Truck and U Haul

The main advantage of trading using opposite Custom Truck and U Haul positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Custom Truck 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 Custom Truck One 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.