Correlation Between GATX and Custom Truck
Can any of the company-specific risk be diversified away by investing in both GATX and Custom Truck 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 GATX and Custom Truck into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GATX Corporation and Custom Truck One, you can compare the effects of market volatilities on GATX and Custom Truck 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 GATX with a short position of Custom Truck. Check out your portfolio center. Please also check ongoing floating volatility patterns of GATX and Custom Truck.
Diversification Opportunities for GATX and Custom Truck
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GATX and Custom is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding GATX Corp. and Custom Truck One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Custom Truck One and GATX 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 GATX Corporation are associated (or correlated) with Custom Truck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Custom Truck One has no effect on the direction of GATX i.e., GATX and Custom Truck go up and down completely randomly.
Pair Corralation between GATX and Custom Truck
Given the investment horizon of 90 days GATX Corporation is expected to generate 0.37 times more return on investment than Custom Truck. However, GATX Corporation is 2.68 times less risky than Custom Truck. It trades about 0.23 of its potential returns per unit of risk. Custom Truck One is currently generating about 0.08 per unit of risk. If you would invest 15,469 in GATX Corporation on November 18, 2024 and sell it today you would earn a total of 1,070 from holding GATX Corporation or generate 6.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GATX Corp. vs. Custom Truck One
Performance |
| Timeline |
| GATX |
| Custom Truck One |
GATX and Custom Truck Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GATX and Custom Truck
The main advantage of trading using opposite GATX and Custom Truck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GATX position performs unexpectedly, Custom Truck 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 Custom Truck will offset losses from the drop in Custom Truck's long position.| GATX vs. Custom Truck One | GATX vs. HE Equipment Services | GATX vs. Alta Equipment Group | GATX vs. McGrath RentCorp |
| Custom Truck vs. PROG Holdings | Custom Truck vs. McGrath RentCorp | Custom Truck vs. HE Equipment Services | Custom Truck vs. GATX Corporation |
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 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.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |