Correlation Between McGrath RentCorp and U Haul

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

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

Diversification Opportunities for McGrath RentCorp and U Haul

-0.47

Correlation Coefficient

McGrath RentCorp  U Haul

Very good diversification

The 3 months correlation between McGrath and UHAL-B is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding McGrath RentCorp 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 McGrath RentCorp 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 McGrath RentCorp 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 McGrath RentCorp i.e., McGrath RentCorp and U Haul go up and down completely randomly.

Pair Corralation between McGrath RentCorp and U Haul

Given the investment horizon of 90 days McGrath RentCorp is expected to generate 0.98 times more return on investment than U Haul. However, McGrath RentCorp is 1.02 times less risky than U Haul. It trades about 0.06 of its potential returns per unit of risk. U Haul Holding is currently generating about -0.09 per unit of risk. If you would invest  10,482  in McGrath RentCorp on September 29, 2024 and sell it today you would earn a total of  597.00  from holding McGrath RentCorp or generate 5.7% return on investment over 90 days.

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

McGrath RentCorp  vs.  U Haul Holding

McGrath RentCorp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in McGrath RentCorp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, McGrath RentCorp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

U Haul Holding

Risk-Adjusted Performance

0 of 100

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 latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with McGrath RentCorp and U Haul

The main advantage of trading using opposite McGrath RentCorp and U Haul positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McGrath RentCorp 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 McGrath RentCorp 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.