Correlation Between Textainer Group and CEA Industries
Can any of the company-specific risk be diversified away by investing in both Textainer Group and CEA Industries 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 CEA Industries 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 CEA Industries, you can compare the effects of market volatilities on Textainer Group and CEA Industries 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 CEA Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Textainer Group and CEA Industries.
Diversification Opportunities for Textainer Group and CEA Industries
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Textainer and CEA is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Textainer Group Holdings and CEA Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEA Industries 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 CEA Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEA Industries has no effect on the direction of Textainer Group i.e., Textainer Group and CEA Industries go up and down completely randomly.
Pair Corralation between Textainer Group and CEA Industries
Assuming the 90 days horizon Textainer Group Holdings is expected to generate 0.89 times more return on investment than CEA Industries. However, Textainer Group Holdings is 1.13 times less risky than CEA Industries. It trades about 0.06 of its potential returns per unit of risk. CEA Industries is currently generating about -0.02 per unit of risk. If you would invest 34.00 in Textainer Group Holdings on August 28, 2024 and sell it today you would earn a total of 39.00 from holding Textainer Group Holdings or generate 114.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Textainer Group Holdings vs. CEA Industries
Performance |
| Timeline |
| Textainer Group Holdings |
| CEA Industries |
Textainer Group and CEA Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Textainer Group and CEA Industries
The main advantage of trading using opposite Textainer Group and CEA Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Textainer Group position performs unexpectedly, CEA Industries 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 CEA Industries will offset losses from the drop in CEA Industries' long position.| Textainer Group vs. Buhler Industries | Textainer Group vs. Austin Engineering Limited | Textainer Group vs. Ag Growth International | Textainer Group vs. Grow Solutions Holdings |
| CEA Industries vs. Rev Group | CEA Industries vs. Caterpillar | CEA Industries vs. Buhler Industries | CEA Industries vs. Austin Engineering Limited |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |