Correlation Between McGrath RentCorp and Textainer Group
Can any of the company-specific risk be diversified away by investing in both McGrath RentCorp 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 McGrath RentCorp and Textainer Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McGrath RentCorp and Textainer Group Holdings, you can compare the effects of market volatilities on McGrath RentCorp 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 McGrath RentCorp with a short position of Textainer Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of McGrath RentCorp and Textainer Group.
Diversification Opportunities for McGrath RentCorp and Textainer Group
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between McGrath and Textainer is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding McGrath RentCorp 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 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 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 McGrath RentCorp i.e., McGrath RentCorp and Textainer Group go up and down completely randomly.
Pair Corralation between McGrath RentCorp and Textainer Group
Given the investment horizon of 90 days McGrath RentCorp is expected to generate 3.4 times less return on investment than Textainer Group. In addition to that, McGrath RentCorp is 1.28 times more volatile than Textainer Group Holdings. It trades about 0.06 of its total potential returns per unit of risk. Textainer Group Holdings is currently generating about 0.25 per unit of volatility. If you would invest 3,679 in Textainer Group Holdings on August 27, 2024 and sell it today you would earn a total of 412.00 from holding Textainer Group Holdings or generate 11.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 9.38% |
| Values | Daily Returns |
McGrath RentCorp vs. Textainer Group Holdings
Performance |
| Timeline |
| McGrath RentCorp |
| Textainer Group Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
McGrath RentCorp and Textainer Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McGrath RentCorp and Textainer Group
The main advantage of trading using opposite McGrath RentCorp and Textainer Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McGrath RentCorp 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.| McGrath RentCorp vs. Alta Equipment Group | McGrath RentCorp vs. GATX Corporation | McGrath RentCorp vs. Mega Matrix Corp | McGrath RentCorp vs. FTAI Aviation Ltd |
| Textainer Group vs. Ryder System | Textainer Group vs. Triton International Limited | Textainer Group vs. Air Lease | Textainer Group vs. Herc 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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