Correlation Between Lion Electric and Textainer Group
Can any of the company-specific risk be diversified away by investing in both Lion Electric and Textainer Group 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 Lion Electric and Textainer Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion Electric Corp and Textainer Group Holdings, you can compare the effects of market volatilities on Lion Electric and Textainer Group 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 Lion Electric with a short position of Textainer Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Electric and Textainer Group.
Diversification Opportunities for Lion Electric and Textainer Group
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lion and Textainer is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Lion Electric Corp and Textainer Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Textainer Group Holdings and Lion Electric 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 Lion Electric Corp are associated (or correlated) with Textainer Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Textainer Group Holdings has no effect on the direction of Lion Electric i.e., Lion Electric and Textainer Group go up and down completely randomly.
Pair Corralation between Lion Electric and Textainer Group
Considering the 90-day investment horizon Lion Electric Corp is expected to under-perform the Textainer Group. In addition to that, Lion Electric is 2.02 times more volatile than Textainer Group Holdings. It trades about -0.16 of its total potential returns per unit of risk. Textainer Group Holdings is currently generating about 0.04 per unit of volatility. If you would invest 66.00 in Textainer Group Holdings on August 28, 2024 and sell it today you would earn a total of 7.00 from holding Textainer Group Holdings or generate 10.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Lion Electric Corp vs. Textainer Group Holdings
Performance |
| Timeline |
| Lion Electric Corp |
| Textainer Group Holdings |
Lion Electric and Textainer Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion Electric and Textainer Group
The main advantage of trading using opposite Lion Electric and Textainer Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Electric position performs unexpectedly, Textainer Group 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 Textainer Group will offset losses from the drop in Textainer Group's long position.| Lion Electric vs. Xos Inc | Lion Electric vs. Nikola Corp | Lion Electric vs. Wabash National | Lion Electric vs. American Premium Water |
| Textainer Group vs. Buhler Industries | Textainer Group vs. Austin Engineering Limited | Textainer Group vs. Ag Growth International | Textainer Group vs. Grow Solutions Holdings |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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