Correlation Between U Haul and SGS SA

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

Diversification Opportunities for U Haul and SGS SA

0.12

Correlation Coefficient

U Haul  SGS SA

Average diversification

The 3 months correlation between UHAL and SGS is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding U Haul Holding and SGS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGS SA 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 SGS SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGS SA has no effect on the direction of U Haul i.e., U Haul and SGS SA go up and down completely randomly.

Pair Corralation between U Haul and SGS SA

Given the investment horizon of 90 days U Haul Holding is expected to under-perform the SGS SA. But the stock apears to be less risky and, when comparing its historical volatility, U Haul Holding is 1.26 times less risky than SGS SA. The stock trades about -0.04 of its potential returns per unit of risk. The SGS SA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,003  in SGS SA on December 19, 2024 and sell it today you would lose (6.00) from holding SGS SA or give up 0.6% of portfolio value over 90 days.

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

U Haul Holding  vs.  SGS SA

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.

SGS SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days SGS SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, SGS SA is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with U Haul and SGS SA

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

The idea behind U Haul Holding and SGS SA 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.