Correlation Between Investcorp India and U Haul

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

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

Diversification Opportunities for Investcorp India and U Haul

-0.06

Correlation Coefficient

Investcorp India  U Haul

Good diversification

The 3 months correlation between Investcorp and UHAL is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Investcorp India Acquisition 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 Investcorp India 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 Investcorp India Acquisition 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 Investcorp India i.e., Investcorp India and U Haul go up and down completely randomly.

Pair Corralation between Investcorp India and U Haul

Assuming the 90 days horizon Investcorp India Acquisition is expected to generate 0.35 times more return on investment than U Haul. However, Investcorp India Acquisition is 2.82 times less risky than U Haul. It trades about 0.05 of its potential returns per unit of risk. U Haul Holding is currently generating about -0.06 per unit of risk. If you would invest  1,167  in Investcorp India Acquisition on December 29, 2024 and sell it today you would earn a total of  19.00  from holding Investcorp India Acquisition or generate 1.63% return on investment over 90 days.

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

Investcorp India Acquisition  vs.  U Haul Holding

Investcorp India Acq

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Investcorp India Acquisition are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Investcorp India is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the 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 Investcorp India and U Haul

The main advantage of trading using opposite Investcorp India and U Haul positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investcorp India 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 Investcorp India Acquisition 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..