Correlation Between U Haul and China Aircraft

Can any of the company-specific risk be diversified away by investing in both U Haul and China Aircraft 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 China Aircraft 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 China Aircraft Leasing, you can compare the effects of market volatilities on U Haul and China Aircraft 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 China Aircraft. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Haul and China Aircraft.

Diversification Opportunities for U Haul and China Aircraft

Average diversification

The 3 months correlation between UHAL and China is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding U-Haul Holding and China Aircraft Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Aircraft Leasing 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 China Aircraft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Aircraft Leasing has no effect on the direction of U Haul i.e., U Haul and China Aircraft go up and down completely randomly.

Pair Corralation between U Haul and China Aircraft

Given the investment horizon of 90 days U Haul is expected to generate 83.21 times less return on investment than China Aircraft. But when comparing it to its historical volatility, U Haul Holding is 6.36 times less risky than China Aircraft. It trades about 0.02 of its potential returns per unit of risk. China Aircraft Leasing is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  44.00  in China Aircraft Leasing on June 27, 2023 and sell it today you would earn a total of  17.00  from holding China Aircraft Leasing or generate 38.64% return on investment over 90 days.

U-Haul Holding  vs.  China Aircraft Leasing

U-Haul Holding

UHAL Performance

2 of 100

Compared to the overall equity markets, risk-adjusted returns on investments in U Haul Holding are ranked lower than 2 (%) 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.

China Aircraft Leasing

China Performance

11 of 100

Compared to the overall equity markets, risk-adjusted returns on investments in China Aircraft Leasing are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent essential indicators, China Aircraft reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with U Haul and China Aircraft

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

The idea behind U Haul Holding and China Aircraft Leasing 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 Focused Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.