Correlation Between GATX and U Haul

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

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

Diversification Opportunities for GATX and U Haul

-0.36

Correlation Coefficient

GATX  U Haul

Very good diversification

The 3 months correlation between GATX and UHAL is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding GATX Corp. 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 GATX 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 GATX Corporation 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 GATX i.e., GATX and U Haul go up and down completely randomly.

Pair Corralation between GATX and U Haul

Given the investment horizon of 90 days GATX Corporation is expected to generate 1.15 times more return on investment than U Haul. However, GATX is 1.15 times more volatile than U Haul Holding. It trades about 0.19 of its potential returns per unit of risk. U Haul Holding is currently generating about 0.03 per unit of risk. If you would invest  13,461  in GATX Corporation on September 3, 2024 and sell it today you would earn a total of  2,979  from holding GATX Corporation or generate 22.13% return on investment over 90 days.

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

GATX Corp.  vs.  U Haul Holding

GATX

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GATX Corporation are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, GATX showed solid returns over the last few months and may actually be approaching a breakup point.

U Haul Holding

Risk-Adjusted Performance

2 of 100

Weak

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.

Pair Trading with GATX and U Haul

The main advantage of trading using opposite GATX and U Haul positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GATX 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 GATX Corporation 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.