Correlation Between GATX and U Haul
Can any of the company-specific risk be diversified away by investing in both GATX 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 GATX and U Haul into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GATX Corporation and U Haul Holding, you can compare the effects of market volatilities on GATX 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 GATX with a short position of U Haul. Check out your portfolio center. Please also check ongoing floating volatility patterns of GATX and U Haul.
Diversification Opportunities for GATX and U Haul
Significant diversification
The 3 months correlation between GATX and UHAL is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding GATX Corp. 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 GATX 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 GATX Corporation 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 GATX i.e., GATX and U Haul go up and down completely randomly.
Pair Corralation between GATX and U Haul
Given the investment horizon of 90 days GATX Corporation is expected to generate 1.21 times more return on investment than U Haul. However, GATX is 1.21 times more volatile than U Haul Holding. It trades about 0.28 of its potential returns per unit of risk. U Haul Holding is currently generating about 0.23 per unit of risk. If you would invest 15,201 in GATX Corporation on November 3, 2024 and sell it today you would earn a total of 1,346 from holding GATX Corporation or generate 8.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GATX Corp. vs. U Haul Holding
Performance |
| Timeline |
| GATX |
| U Haul Holding |
GATX and U Haul Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GATX and U Haul
The main advantage of trading using opposite GATX and U Haul positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GATX 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.| GATX vs. Custom Truck One | GATX vs. HE Equipment Services | GATX vs. Alta Equipment Group | GATX vs. McGrath RentCorp |
| U Haul vs. Air Lease | U Haul vs. HE Equipment Services | U Haul vs. GATX Corporation | U Haul vs. Custom Truck One |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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