Correlation Between GATX and Jeld Wen
Can any of the company-specific risk be diversified away by investing in both GATX and Jeld Wen 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 Jeld Wen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GATX Corporation and Jeld Wen Holding, you can compare the effects of market volatilities on GATX and Jeld Wen 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 Jeld Wen. Check out your portfolio center. Please also check ongoing floating volatility patterns of GATX and Jeld Wen.
Diversification Opportunities for GATX and Jeld Wen
Very good diversification
The 3 months correlation between GATX and Jeld is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding GATX Corp. and Jeld Wen Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeld Wen Holding 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 Jeld Wen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeld Wen Holding has no effect on the direction of GATX i.e., GATX and Jeld Wen go up and down completely randomly.
Pair Corralation between GATX and Jeld Wen
Given the investment horizon of 90 days GATX is expected to generate 1.41 times less return on investment than Jeld Wen. But when comparing it to its historical volatility, GATX Corporation is 2.53 times less risky than Jeld Wen. It trades about 0.33 of its potential returns per unit of risk. Jeld Wen Holding is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 771.00 in Jeld Wen Holding on November 9, 2024 and sell it today you would earn a total of 100.00 from holding Jeld Wen Holding or generate 12.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GATX Corp. vs. Jeld Wen Holding
Performance |
| Timeline |
| GATX |
| Jeld Wen Holding |
GATX and Jeld Wen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GATX and Jeld Wen
The main advantage of trading using opposite GATX and Jeld Wen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GATX position performs unexpectedly, Jeld Wen 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 Jeld Wen will offset losses from the drop in Jeld Wen's long position.| GATX vs. Custom Truck One | GATX vs. HE Equipment Services | GATX vs. Alta Equipment Group | GATX vs. McGrath RentCorp |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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