Correlation Between U Haul and Olympic Steel
Can any of the company-specific risk be diversified away by investing in both U Haul and Olympic Steel 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 Olympic Steel 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 Olympic Steel, you can compare the effects of market volatilities on U Haul and Olympic Steel 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 Olympic Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Haul and Olympic Steel.
Diversification Opportunities for U Haul and Olympic Steel
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between UHAL and Olympic is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding U Haul Holding and Olympic Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olympic Steel 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 Olympic Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Olympic Steel has no effect on the direction of U Haul i.e., U Haul and Olympic Steel go up and down completely randomly.
Pair Corralation between U Haul and Olympic Steel
Given the investment horizon of 90 days U Haul Holding is expected to generate 0.65 times more return on investment than Olympic Steel. However, U Haul Holding is 1.55 times less risky than Olympic Steel. It trades about 0.05 of its potential returns per unit of risk. Olympic Steel is currently generating about -0.03 per unit of risk. If you would invest 5,882 in U Haul Holding on September 3, 2024 and sell it today you would earn a total of 1,252 from holding U Haul Holding or generate 21.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
U Haul Holding vs. Olympic Steel
Performance |
| Timeline |
| U Haul Holding |
| Olympic Steel |
U Haul and Olympic Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Haul and Olympic Steel
The main advantage of trading using opposite U Haul and Olympic Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Haul position performs unexpectedly, Olympic Steel 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 Olympic Steel will offset losses from the drop in Olympic Steel'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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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