Correlation Between U Haul and Dennys Corp
Can any of the company-specific risk be diversified away by investing in both U Haul and Dennys Corp 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 Dennys Corp 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 Dennys Corp, you can compare the effects of market volatilities on U Haul and Dennys Corp 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 Dennys Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Haul and Dennys Corp.
Diversification Opportunities for U Haul and Dennys Corp
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between UHAL and Dennys is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding U Haul Holding and Dennys Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dennys Corp 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 Dennys Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dennys Corp has no effect on the direction of U Haul i.e., U Haul and Dennys Corp go up and down completely randomly.
Pair Corralation between U Haul and Dennys Corp
Given the investment horizon of 90 days U Haul Holding is expected to generate 0.72 times more return on investment than Dennys Corp. However, U Haul Holding is 1.38 times less risky than Dennys Corp. It trades about 0.02 of its potential returns per unit of risk. Dennys Corp is currently generating about -0.02 per unit of risk. If you would invest 6,526 in U Haul Holding on September 3, 2024 and sell it today you would earn a total of 541.00 from holding U Haul Holding or generate 8.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
U Haul Holding vs. Dennys Corp
Performance |
| Timeline |
| U Haul Holding |
| Dennys Corp |
U Haul and Dennys Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Haul and Dennys Corp
The main advantage of trading using opposite U Haul and Dennys Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Haul position performs unexpectedly, Dennys Corp 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 Dennys Corp will offset losses from the drop in Dennys Corp's long position.| U Haul vs. Hertz Global Hldgs | U Haul vs. Ryder System | U Haul vs. HE Equipment Services | U Haul vs. United Rentals |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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