Correlation Between McGrath RentCorp and Triplepoint Venture
Can any of the company-specific risk be diversified away by investing in both McGrath RentCorp and Triplepoint Venture 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 Triplepoint Venture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McGrath RentCorp and Triplepoint Venture Growth, you can compare the effects of market volatilities on McGrath RentCorp and Triplepoint Venture 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 Triplepoint Venture. Check out your portfolio center. Please also check ongoing floating volatility patterns of McGrath RentCorp and Triplepoint Venture.
Diversification Opportunities for McGrath RentCorp and Triplepoint Venture
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between McGrath and Triplepoint is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding McGrath RentCorp and Triplepoint Venture Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triplepoint Venture 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 Triplepoint Venture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triplepoint Venture has no effect on the direction of McGrath RentCorp i.e., McGrath RentCorp and Triplepoint Venture go up and down completely randomly.
Pair Corralation between McGrath RentCorp and Triplepoint Venture
Given the investment horizon of 90 days McGrath RentCorp is expected to generate 1.0 times more return on investment than Triplepoint Venture. However, McGrath RentCorp is 1.0 times more volatile than Triplepoint Venture Growth. It trades about 0.44 of its potential returns per unit of risk. Triplepoint Venture Growth is currently generating about 0.22 per unit of risk. If you would invest 11,076 in McGrath RentCorp on November 4, 2024 and sell it today you would earn a total of 1,191 from holding McGrath RentCorp or generate 10.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
McGrath RentCorp vs. Triplepoint Venture Growth
Performance |
| Timeline |
| McGrath RentCorp |
| Triplepoint Venture |
McGrath RentCorp and Triplepoint Venture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McGrath RentCorp and Triplepoint Venture
The main advantage of trading using opposite McGrath RentCorp and Triplepoint Venture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McGrath RentCorp position performs unexpectedly, Triplepoint Venture 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 Triplepoint Venture will offset losses from the drop in Triplepoint Venture'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 |
| Triplepoint Venture vs. BlackRock TCP Capital | Triplepoint Venture vs. Sixth Street Specialty | Triplepoint Venture vs. Golub Capital BDC | Triplepoint Venture vs. New Mountain Finance |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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