Correlation Between U Haul and Ashtead Gro

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

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

Diversification Opportunities for U Haul and Ashtead Gro

-0.03

Correlation Coefficient

U Haul  Ashtead Gro

Good diversification

The 3 months correlation between UHAL and Ashtead is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding U Haul Holding and Ashtead Gro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashtead Gro and U Haul 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 U Haul Holding are associated (or correlated) with Ashtead Gro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashtead Gro has no effect on the direction of U Haul i.e., U Haul and Ashtead Gro go up and down completely randomly.

Pair Corralation between U Haul and Ashtead Gro

Given the investment horizon of 90 days U Haul Holding is expected to generate 0.62 times more return on investment than Ashtead Gro. However, U Haul Holding is 1.6 times less risky than Ashtead Gro. It trades about 0.06 of its potential returns per unit of risk. Ashtead Gro is currently generating about 0.0 per unit of risk. If you would invest  7,021  in U Haul Holding on September 12, 2024 and sell it today you would earn a total of  388.50  from holding U Haul Holding or generate 5.53% return on investment over 90 days.

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

U Haul Holding  vs.  Ashtead Gro

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.

Ashtead Gro

Risk-Adjusted Performance

0 of 100

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 recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with U Haul and Ashtead Gro

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

The idea behind U Haul Holding and Ashtead Gro 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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.