Correlation Between U Haul and Ryder System

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

Diversification Opportunities for U Haul and Ryder System

-0.39

Correlation Coefficient

U Haul  Ryder System

Very good diversification

The 3 months correlation between UHAL-B and Ryder is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding U Haul Holding and Ryder System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ryder System and U Haul 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 Ryder System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ryder System has no effect on the direction of U Haul i.e., U Haul and Ryder System go up and down completely randomly.

Pair Corralation between U Haul and Ryder System

Assuming the 90 days trading horizon U Haul Holding is expected to under-perform the Ryder System. In addition to that, U Haul is 1.29 times more volatile than Ryder System. It trades about -0.04 of its total potential returns per unit of risk. Ryder System is currently generating about 0.0 per unit of volatility. If you would invest  16,400  in Ryder System on October 17, 2024 and sell it today you would lose (41.00) from holding Ryder System or give up 0.25% of portfolio value over 90 days.

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

U Haul Holding  vs.  Ryder System

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 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ryder System

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ryder System are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Ryder System may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with U Haul and Ryder System

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

The idea behind U Haul Holding and Ryder System 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.

Check out your portfolio center.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.