Correlation Between Encompass Holdings and U Haul

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

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

Diversification Opportunities for Encompass Holdings and U Haul

0.0

Correlation Coefficient

Encompass Holdings  U Haul

Pay attention - limited upside

The 3 months correlation between Encompass and UHAL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Encompass Holdings 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 Encompass Holdings 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 Encompass Holdings 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 Encompass Holdings i.e., Encompass Holdings and U Haul go up and down completely randomly.

Pair Corralation between Encompass Holdings and U Haul

If you would invest  6,033  in U Haul Holding on September 27, 2024 and sell it today you would earn a total of  1,028  from holding U Haul Holding or generate 17.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Encompass Holdings  vs.  U Haul Holding

Encompass Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Encompass Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong primary indicators, Encompass Holdings is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

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 Encompass Holdings and U Haul

The main advantage of trading using opposite Encompass Holdings and U Haul positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Encompass Holdings 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 Encompass Holdings 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.