Correlation Between United Parcel and U Haul
Can any of the company-specific risk be diversified away by investing in both United Parcel 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 United Parcel and U Haul into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Parcel Service and U Haul Holding, you can compare the effects of market volatilities on United Parcel 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 United Parcel with a short position of U Haul. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Parcel and U Haul.
Diversification Opportunities for United Parcel and U Haul
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between United and UHAL is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding United Parcel Service 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 United Parcel 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 United Parcel Service 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 United Parcel i.e., United Parcel and U Haul go up and down completely randomly.
Pair Corralation between United Parcel and U Haul
Considering the 90-day investment horizon United Parcel Service is expected to under-perform the U Haul. But the stock apears to be less risky and, when comparing its historical volatility, United Parcel Service is 1.23 times less risky than U Haul. The stock trades about -0.01 of its potential returns per unit of risk. The U Haul Holding is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5,395 in U Haul Holding on January 20, 2024 and sell it today you would earn a total of 930.00 from holding U Haul Holding or generate 17.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Parcel Service vs. U Haul Holding
Performance |
| Timeline |
| United Parcel Service |
| U Haul Holding |
United Parcel and U Haul Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Parcel and U Haul
The main advantage of trading using opposite United Parcel and U Haul positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Parcel 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.The idea behind United Parcel Service and U Haul Holding 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.| U Haul vs. Hertz Global Hldgs | U Haul vs. HE Equipment Services | U Haul vs. United Rentals | U Haul vs. Herc Holdings |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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