Correlation Between Custom Truck and U Haul

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

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

Diversification Opportunities for Custom Truck and U Haul

0.49

Correlation Coefficient

Custom Truck  U Haul

Very weak diversification

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

Pair Corralation between Custom Truck and U Haul

Given the investment horizon of 90 days Custom Truck One is expected to under-perform the U Haul. In addition to that, Custom Truck is 2.51 times more volatile than U Haul Holding. It trades about -0.05 of its total potential returns per unit of risk. U Haul Holding is currently generating about 0.01 per unit of volatility. If you would invest  6,901  in U Haul Holding on December 2, 2024 and sell it today you would earn a total of  24.00  from holding U Haul Holding or generate 0.35% return on investment over 90 days.

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

Custom Truck One  vs.  U Haul Holding

Custom Truck One

Risk-Adjusted Performance

Very Weak

Over the last 90 days Custom Truck One has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

U Haul Holding

Risk-Adjusted Performance

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.

Pair Trading with Custom Truck and U Haul

The main advantage of trading using opposite Custom Truck and U Haul positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Custom Truck 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 Custom Truck One 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.