Correlation Between Multi Ways and Custom Truck
Can any of the company-specific risk be diversified away by investing in both Multi Ways and Custom Truck 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 Multi Ways and Custom Truck into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Ways Holdings and Custom Truck One, you can compare the effects of market volatilities on Multi Ways and Custom Truck 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 Multi Ways with a short position of Custom Truck. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Ways and Custom Truck.
Diversification Opportunities for Multi Ways and Custom Truck
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Multi and Custom is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Multi Ways Holdings and Custom Truck One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Custom Truck One and Multi Ways 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 Multi Ways Holdings are associated (or correlated) with Custom Truck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Custom Truck One has no effect on the direction of Multi Ways i.e., Multi Ways and Custom Truck go up and down completely randomly.
Pair Corralation between Multi Ways and Custom Truck
Considering the 90-day investment horizon Multi Ways Holdings is expected to generate 2.31 times more return on investment than Custom Truck. However, Multi Ways is 2.31 times more volatile than Custom Truck One. It trades about 0.04 of its potential returns per unit of risk. Custom Truck One is currently generating about 0.02 per unit of risk. If you would invest 27.00 in Multi Ways Holdings on August 31, 2024 and sell it today you would lose (1.00) from holding Multi Ways Holdings or give up 3.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Ways Holdings vs. Custom Truck One
Performance |
| Timeline |
| Multi Ways Holdings |
| Custom Truck One |
Multi Ways and Custom Truck Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Ways and Custom Truck
The main advantage of trading using opposite Multi Ways and Custom Truck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Ways position performs unexpectedly, Custom Truck 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 Custom Truck will offset losses from the drop in Custom Truck's long position.| Multi Ways vs. FlexShopper | Multi Ways vs. Hertz Global Holdings | Multi Ways vs. HyreCar | Multi Ways vs. Avis Budget Group |
| Custom Truck vs. PROG Holdings | Custom Truck vs. McGrath RentCorp | Custom Truck vs. HE Equipment Services | Custom Truck vs. GATX Corporation |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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