Correlation Between PACCAR and Textainer Group
Can any of the company-specific risk be diversified away by investing in both PACCAR 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 PACCAR and Textainer Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PACCAR Inc and Textainer Group Holdings, you can compare the effects of market volatilities on PACCAR 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 PACCAR with a short position of Textainer Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of PACCAR and Textainer Group.
Diversification Opportunities for PACCAR and Textainer Group
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PACCAR and Textainer is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding PACCAR Inc 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 PACCAR 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 PACCAR Inc 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 PACCAR i.e., PACCAR and Textainer Group go up and down completely randomly.
Pair Corralation between PACCAR and Textainer Group
Given the investment horizon of 90 days PACCAR Inc is expected to generate 0.58 times more return on investment than Textainer Group. However, PACCAR Inc is 1.72 times less risky than Textainer Group. It trades about 0.26 of its potential returns per unit of risk. Textainer Group Holdings is currently generating about -0.01 per unit of risk. If you would invest 10,401 in PACCAR Inc on September 1, 2024 and sell it today you would earn a total of 1,299 from holding PACCAR Inc or generate 12.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PACCAR Inc vs. Textainer Group Holdings
Performance |
| Timeline |
| PACCAR Inc |
| Textainer Group Holdings |
PACCAR and Textainer Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PACCAR and Textainer Group
The main advantage of trading using opposite PACCAR and Textainer Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PACCAR 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.The idea behind PACCAR Inc and Textainer Group Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Textainer Group vs. Buhler Industries | Textainer Group vs. Austin Engineering Limited | Textainer Group vs. Ag Growth International | Textainer Group vs. Grow Solutions 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| CEOs Directory Screen CEOs from public companies around the world | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |