Correlation Between Fortress Transp and U Haul

Can any of the company-specific risk be diversified away by investing in both Fortress Transp 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 Fortress Transp and U Haul into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fortress Transp Infra and U Haul Holding, you can compare the effects of market volatilities on Fortress Transp 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 Fortress Transp with a short position of U Haul. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortress Transp and U Haul.

Diversification Opportunities for Fortress Transp and U Haul

-0.07

Correlation Coefficient

Fortress Transp  U Haul

Good diversification

The 3 months correlation between Fortress and UHAL is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Fortress Transp Infra 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 Fortress Transp 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 Fortress Transp Infra 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 Fortress Transp i.e., Fortress Transp and U Haul go up and down completely randomly.

Pair Corralation between Fortress Transp and U Haul

Given the investment horizon of 90 days Fortress Transp Infra is expected to generate 2.0 times more return on investment than U Haul. However, Fortress Transp is 2.0 times more volatile than U Haul Holding. It trades about 0.27 of its potential returns per unit of risk. U Haul Holding is currently generating about -0.03 per unit of risk. If you would invest  14,224  in Fortress Transp Infra on August 28, 2024 and sell it today you would earn a total of  2,972  from holding Fortress Transp Infra or generate 20.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Fortress Transp Infra  vs.  U Haul Holding

Fortress Transp Infra

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fortress Transp Infra are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile basic indicators, Fortress Transp demonstrated solid returns over the last few months and may actually be approaching a breakup point.

U Haul Holding

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in U Haul Holding are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, U Haul is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Fortress Transp and U Haul

The main advantage of trading using opposite Fortress Transp and U Haul positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortress Transp 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 Fortress Transp Infra 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.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.