Correlation Between U-Haul Holding and Fortress Transp

Can any of the company-specific risk be diversified away by investing in both U-Haul Holding and Fortress Transp 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 Holding and Fortress Transp 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 Fortress Transp Infra, you can compare the effects of market volatilities on U-Haul Holding and Fortress Transp 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 Holding with a short position of Fortress Transp. Check out your portfolio center. Please also check ongoing floating volatility patterns of U-Haul Holding and Fortress Transp.

Diversification Opportunities for U-Haul Holding and Fortress Transp

-0.65

Correlation Coefficient

U-Haul Holding  Fortress Transp

Excellent diversification

The 3 months correlation between U-Haul and Fortress is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding U Haul Holding and Fortress Transp Infra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortress Transp Infra and U-Haul Holding 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 Fortress Transp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortress Transp Infra has no effect on the direction of U-Haul Holding i.e., U-Haul Holding and Fortress Transp go up and down completely randomly.

Pair Corralation between U-Haul Holding and Fortress Transp

Assuming the 90 days trading horizon U Haul Holding is expected to under-perform the Fortress Transp. But the stock apears to be less risky and, when comparing its historical volatility, U Haul Holding is 1.73 times less risky than Fortress Transp. The stock trades about -0.06 of its potential returns per unit of risk. The Fortress Transp Infra is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  11,771  in Fortress Transp Infra on September 2, 2024 and sell it today you would earn a total of  5,111  from holding Fortress Transp Infra or generate 43.42% return on investment over 90 days.

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

U Haul Holding  vs.  Fortress Transp Infra

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 somewhat strong basic indicators, U-Haul Holding is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Fortress Transp Infra

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fortress Transp Infra are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Fortress Transp demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with U-Haul Holding and Fortress Transp

The main advantage of trading using opposite U-Haul Holding and Fortress Transp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U-Haul Holding position performs unexpectedly, Fortress Transp 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 Fortress Transp will offset losses from the drop in Fortress Transp's long position.

The idea behind U Haul Holding and Fortress Transp Infra 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.