Correlation Between GATX and Multi Ways
Can any of the company-specific risk be diversified away by investing in both GATX and Multi Ways 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 Multi Ways into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GATX Corporation and Multi Ways Holdings, you can compare the effects of market volatilities on GATX and Multi Ways 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 Multi Ways. Check out your portfolio center. Please also check ongoing floating volatility patterns of GATX and Multi Ways.
Diversification Opportunities for GATX and Multi Ways
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GATX and Multi is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding GATX Corp. and Multi Ways Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Ways Holdings 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 Multi Ways. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Ways Holdings has no effect on the direction of GATX i.e., GATX and Multi Ways go up and down completely randomly.
Pair Corralation between GATX and Multi Ways
Given the investment horizon of 90 days GATX Corporation is expected to generate 0.4 times more return on investment than Multi Ways. However, GATX Corporation is 2.49 times less risky than Multi Ways. It trades about 0.23 of its potential returns per unit of risk. Multi Ways Holdings is currently generating about 0.01 per unit of risk. If you would invest 15,179 in GATX Corporation on September 18, 2024 and sell it today you would earn a total of 932.00 from holding GATX Corporation or generate 6.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GATX Corp. vs. Multi Ways Holdings
Performance |
| Timeline |
| GATX |
| Multi Ways Holdings |
GATX and Multi Ways Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GATX and Multi Ways
The main advantage of trading using opposite GATX and Multi Ways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GATX position performs unexpectedly, Multi Ways 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 Multi Ways will offset losses from the drop in Multi Ways' 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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