Correlation Between U Haul and Dow Jones
Can any of the company-specific risk be diversified away by investing in both U Haul and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on U Haul and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Haul and Dow Jones.
Diversification Opportunities for U Haul and Dow Jones
Poor diversification
The 3 months correlation between UHAL and Dow is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding U Haul Holding and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of U Haul i.e., U Haul and Dow Jones go up and down completely randomly.
Pair Corralation between U Haul and Dow Jones
Given the investment horizon of 90 days U Haul Holding is expected to generate 2.15 times more return on investment than Dow Jones. However, U Haul is 2.15 times more volatile than Dow Jones Industrial. It trades about 0.15 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.2 per unit of risk. If you would invest 7,163 in U Haul Holding on November 18, 2024 and sell it today you would earn a total of 263.00 from holding U Haul Holding or generate 3.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
U Haul Holding vs. Dow Jones Industrial
Performance |
| Timeline |
U Haul and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
U Haul Holding
Pair trading matchups for U Haul
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with U Haul and Dow Jones
The main advantage of trading using opposite U Haul and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Haul position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| U Haul vs. Air Lease | U Haul vs. HE Equipment Services | U Haul vs. GATX Corporation | U Haul vs. Custom Truck One |
| Dow Jones vs. Palomar Holdings | Dow Jones vs. Mesa Air Group | Dow Jones vs. LATAM Airlines Group | Dow Jones vs. Unum Group |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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