Correlation Between McGrath RentCorp and Fortress Transportation
Can any of the company-specific risk be diversified away by investing in both McGrath RentCorp and Fortress Transportation 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 McGrath RentCorp and Fortress Transportation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McGrath RentCorp and Fortress Transportation and, you can compare the effects of market volatilities on McGrath RentCorp and Fortress Transportation 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 McGrath RentCorp with a short position of Fortress Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of McGrath RentCorp and Fortress Transportation.
Diversification Opportunities for McGrath RentCorp and Fortress Transportation
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between McGrath and Fortress is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding McGrath RentCorp and Fortress Transportation and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortress Transportation and McGrath RentCorp 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 McGrath RentCorp are associated (or correlated) with Fortress Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortress Transportation has no effect on the direction of McGrath RentCorp i.e., McGrath RentCorp and Fortress Transportation go up and down completely randomly.
Pair Corralation between McGrath RentCorp and Fortress Transportation
Given the investment horizon of 90 days McGrath RentCorp is expected to generate 1.19 times less return on investment than Fortress Transportation. In addition to that, McGrath RentCorp is 1.44 times more volatile than Fortress Transportation and. It trades about 0.04 of its total potential returns per unit of risk. Fortress Transportation and is currently generating about 0.07 per unit of volatility. If you would invest 1,804 in Fortress Transportation and on August 30, 2024 and sell it today you would earn a total of 805.00 from holding Fortress Transportation and or generate 44.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
McGrath RentCorp vs. Fortress Transportation and
Performance |
| Timeline |
| McGrath RentCorp |
| Fortress Transportation |
McGrath RentCorp and Fortress Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McGrath RentCorp and Fortress Transportation
The main advantage of trading using opposite McGrath RentCorp and Fortress Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McGrath RentCorp position performs unexpectedly, Fortress Transportation 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 Fortress Transportation will offset losses from the drop in Fortress Transportation's long position.| McGrath RentCorp vs. Alta Equipment Group | McGrath RentCorp vs. GATX Corporation | McGrath RentCorp vs. Mega Matrix Corp | McGrath RentCorp vs. FTAI Aviation Ltd |
| Fortress Transportation vs. Fortress Transportation and | Fortress Transportation vs. SiriusPoint | Fortress Transportation vs. New York Mortgage | Fortress Transportation vs. Compass Diversified |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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