Correlation Between U-Haul Holding and Maiden Holdings

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

Diversification Opportunities for U-Haul Holding and Maiden Holdings

-0.04

Correlation Coefficient

U-Haul Holding  Maiden Holdings

Good diversification

The 3 months correlation between U-Haul and Maiden is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding U Haul Holding and Maiden Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maiden Holdings 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 Maiden Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maiden Holdings has no effect on the direction of U-Haul Holding i.e., U-Haul Holding and Maiden Holdings go up and down completely randomly.

Pair Corralation between U-Haul Holding and Maiden Holdings

Assuming the 90 days trading horizon U Haul Holding is expected to generate 0.73 times more return on investment than Maiden Holdings. However, U Haul Holding is 1.37 times less risky than Maiden Holdings. It trades about -0.03 of its potential returns per unit of risk. Maiden Holdings is currently generating about -0.09 per unit of risk. If you would invest  6,356  in U Haul Holding on December 1, 2024 and sell it today you would lose (201.00) from holding U Haul Holding or give up 3.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

U Haul Holding  vs.  Maiden Holdings

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

Maiden Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Maiden Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's essential 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 U-Haul Holding and Maiden Holdings

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

The idea behind U Haul Holding and Maiden Holdings 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.