Correlation Between Textainer Group and Alta Equipment
Can any of the company-specific risk be diversified away by investing in both Textainer Group and Alta Equipment 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 Textainer Group and Alta Equipment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Textainer Group Holdings and Alta Equipment Group, you can compare the effects of market volatilities on Textainer Group and Alta Equipment 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 Textainer Group with a short position of Alta Equipment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Textainer Group and Alta Equipment.
Diversification Opportunities for Textainer Group and Alta Equipment
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Textainer and Alta is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Textainer Group Holdings and Alta Equipment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alta Equipment Group and Textainer Group 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 Textainer Group Holdings are associated (or correlated) with Alta Equipment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alta Equipment Group has no effect on the direction of Textainer Group i.e., Textainer Group and Alta Equipment go up and down completely randomly.
Pair Corralation between Textainer Group and Alta Equipment
Considering the 90-day investment horizon Textainer Group Holdings is expected to generate 0.45 times more return on investment than Alta Equipment. However, Textainer Group Holdings is 2.24 times less risky than Alta Equipment. It trades about 0.15 of its potential returns per unit of risk. Alta Equipment Group is currently generating about 0.0 per unit of risk. If you would invest 2,876 in Textainer Group Holdings on August 27, 2024 and sell it today you would earn a total of 1,215 from holding Textainer Group Holdings or generate 42.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 31.85% |
| Values | Daily Returns |
Textainer Group Holdings vs. Alta Equipment Group
Performance |
| Timeline |
| Textainer Group Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Alta Equipment Group |
Textainer Group and Alta Equipment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Textainer Group and Alta Equipment
The main advantage of trading using opposite Textainer Group and Alta Equipment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Textainer Group position performs unexpectedly, Alta Equipment 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 Alta Equipment will offset losses from the drop in Alta Equipment's long position.| Textainer Group vs. Ryder System | Textainer Group vs. Triton International Limited | Textainer Group vs. Air Lease | Textainer Group vs. Herc Holdings |
| Alta Equipment vs. PROG Holdings | Alta Equipment vs. McGrath RentCorp | Alta Equipment vs. Mega Matrix Corp | Alta Equipment vs. FTAI Aviation Ltd |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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