Correlation Between Custom Truck and Global Net
Can any of the company-specific risk be diversified away by investing in both Custom Truck and Global Net 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 Custom Truck and Global Net into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Custom Truck One and Global Net Lease, you can compare the effects of market volatilities on Custom Truck and Global Net 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 Custom Truck with a short position of Global Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Custom Truck and Global Net.
Diversification Opportunities for Custom Truck and Global Net
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Custom and Global is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Custom Truck One and Global Net Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Net Lease and Custom Truck 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 Custom Truck One are associated (or correlated) with Global Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Net Lease has no effect on the direction of Custom Truck i.e., Custom Truck and Global Net go up and down completely randomly.
Pair Corralation between Custom Truck and Global Net
Given the investment horizon of 90 days Custom Truck One is expected to under-perform the Global Net. In addition to that, Custom Truck is 2.89 times more volatile than Global Net Lease. It trades about 0.0 of its total potential returns per unit of risk. Global Net Lease is currently generating about 0.05 per unit of volatility. If you would invest 1,994 in Global Net Lease on November 9, 2024 and sell it today you would earn a total of 308.00 from holding Global Net Lease or generate 15.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Custom Truck One vs. Global Net Lease
Performance |
| Timeline |
| Custom Truck One |
| Global Net Lease |
Custom Truck and Global Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Custom Truck and Global Net
The main advantage of trading using opposite Custom Truck and Global Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Custom Truck position performs unexpectedly, Global Net 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 Global Net will offset losses from the drop in Global Net's long position.| Custom Truck vs. PROG Holdings | Custom Truck vs. McGrath RentCorp | Custom Truck vs. HE Equipment Services | Custom Truck vs. GATX Corporation |
| Global Net vs. Keurig Dr Pepper | Global Net vs. Celsius Holdings | Global Net vs. KVH Industries | Global Net vs. Emerson Electric |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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