Correlation Between Loandepot and U Haul

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

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

Diversification Opportunities for Loandepot and U Haul

0.34

Correlation Coefficient

Loandepot  U Haul

Weak diversification

The 3 months correlation between Loandepot and UHAL is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Loandepot 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 Loandepot 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 Loandepot 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 Loandepot i.e., Loandepot and U Haul go up and down completely randomly.

Pair Corralation between Loandepot and U Haul

Considering the 90-day investment horizon Loandepot is expected to under-perform the U Haul. In addition to that, Loandepot is 2.61 times more volatile than U Haul Holding. It trades about -0.1 of its total potential returns per unit of risk. U Haul Holding is currently generating about -0.09 per unit of volatility. If you would invest  7,444  in U Haul Holding on September 21, 2024 and sell it today you would lose (698.00) from holding U Haul Holding or give up 9.38% of portfolio value over 90 days.

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

Loandepot  vs.  U Haul Holding

Loandepot

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Loandepot has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm 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 Loandepot and U Haul

The main advantage of trading using opposite Loandepot and U Haul positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loandepot 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 Loandepot 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.