Correlation Between Willamette Valley and U Haul

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

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

Diversification Opportunities for Willamette Valley and U Haul

0.49

Correlation Coefficient

Willamette Valley  U Haul

Very weak diversification

The 3 months correlation between Willamette and UHAL-B is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Willamette Valley Vineyards 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 Willamette Valley 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 Willamette Valley Vineyards 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 Willamette Valley i.e., Willamette Valley and U Haul go up and down completely randomly.

Pair Corralation between Willamette Valley and U Haul

Given the investment horizon of 90 days Willamette Valley Vineyards is expected to under-perform the U Haul. In addition to that, Willamette Valley is 1.08 times more volatile than U Haul Holding. It trades about -0.11 of its total potential returns per unit of risk. U Haul Holding is currently generating about 0.0 per unit of volatility. If you would invest  6,705  in U Haul Holding on September 12, 2024 and sell it today you would lose (35.00) from holding U Haul Holding or give up 0.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Willamette Valley Vineyards  vs.  U Haul Holding

Willamette Valley

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Willamette Valley Vineyards has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains 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 somewhat strong basic indicators, U Haul is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Willamette Valley and U Haul

The main advantage of trading using opposite Willamette Valley and U Haul positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Willamette Valley 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 Willamette Valley Vineyards 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.