Correlation Between NYSE Composite and GATX
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and GATX 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 NYSE Composite and GATX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and GATX Corporation, you can compare the effects of market volatilities on NYSE Composite and GATX 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 NYSE Composite with a short position of GATX. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and GATX.
Diversification Opportunities for NYSE Composite and GATX
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and GATX is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and GATX Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GATX and NYSE Composite 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 NYSE Composite are associated (or correlated) with GATX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GATX has no effect on the direction of NYSE Composite i.e., NYSE Composite and GATX go up and down completely randomly.
Pair Corralation between NYSE Composite and GATX
Assuming the 90 days trading horizon NYSE Composite is expected to generate 4.29 times less return on investment than GATX. But when comparing it to its historical volatility, NYSE Composite is 2.94 times less risky than GATX. It trades about 0.26 of its potential returns per unit of risk. GATX Corporation is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 13,941 in GATX Corporation on August 30, 2024 and sell it today you would earn a total of 2,429 from holding GATX Corporation or generate 17.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. GATX Corp.
Performance |
| Timeline |
NYSE Composite and GATX Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
GATX Corporation
Pair trading matchups for GATX
Pair Trading with NYSE Composite and GATX
The main advantage of trading using opposite NYSE Composite and GATX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, GATX 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 GATX will offset losses from the drop in GATX's long position.| NYSE Composite vs. Delek Drilling | NYSE Composite vs. Helmerich and Payne | NYSE Composite vs. Waste Management | NYSE Composite vs. US Global Investors |
| GATX vs. Custom Truck One | GATX vs. HE Equipment Services | GATX vs. Alta Equipment Group | GATX vs. McGrath RentCorp |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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