Correlation Between U Haul and GATX

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

Diversification Opportunities for U Haul and GATX

-0.29
  Correlation Coefficient

Very good diversification

The 3 months correlation between UHAL and GATX is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding U-Haul Holding and GATX Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GATX 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 GATX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GATX has no effect on the direction of U Haul i.e., U Haul and GATX go up and down completely randomly.

Pair Corralation between U Haul and GATX

Given the investment horizon of 90 days U Haul Holding is expected to generate 1.27 times more return on investment than GATX. However, U Haul is 1.27 times more volatile than GATX Corporation. It trades about 0.03 of its potential returns per unit of risk. GATX Corporation is currently generating about 0.03 per unit of risk. If you would invest  5,509  in U Haul Holding on December 30, 2023 and sell it today you would earn a total of  1,245  from holding U Haul Holding or generate 22.6% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

U-Haul Holding  vs.  GATX Corp.

 Performance 
       Timeline  
U-Haul Holding 

Risk-Adjusted Performance

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Low
 
High
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 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.
GATX 

Risk-Adjusted Performance

10 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in GATX Corporation are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, GATX may actually be approaching a critical reversion point that can send shares even higher in April 2024.

U Haul and GATX Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with U Haul and GATX

The main advantage of trading using opposite U Haul and GATX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Haul position performs unexpectedly, GATX 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 GATX will offset losses from the drop in GATX's long position.
The idea behind U Haul Holding and GATX Corporation 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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