Correlation Between GATX and Alta Equipment

Can any of the company-specific risk be diversified away by investing in both GATX 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 GATX and Alta Equipment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GATX Corporation and Alta Equipment Group, you can compare the effects of market volatilities on GATX 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 GATX with a short position of Alta Equipment. Check out your portfolio center. Please also check ongoing floating volatility patterns of GATX and Alta Equipment.

Diversification Opportunities for GATX and Alta Equipment

0.36

Correlation Coefficient

GATX  Alta Equipment

Weak diversification

The 3 months correlation between GATX and Alta is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding GATX Corp. 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 GATX 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 GATX Corporation 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 GATX i.e., GATX and Alta Equipment go up and down completely randomly.

Pair Corralation between GATX and Alta Equipment

Given the investment horizon of 90 days GATX Corporation is expected to generate 0.32 times more return on investment than Alta Equipment. However, GATX Corporation is 3.13 times less risky than Alta Equipment. It trades about 0.04 of its potential returns per unit of risk. Alta Equipment Group is currently generating about -0.1 per unit of risk. If you would invest  15,485  in GATX Corporation on December 27, 2024 and sell it today you would earn a total of  436.00  from holding GATX Corporation or generate 2.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

GATX Corp.  vs.  Alta Equipment Group

GATX

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GATX Corporation are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, GATX is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Alta Equipment Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alta Equipment Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with GATX and Alta Equipment

The main advantage of trading using opposite GATX and Alta Equipment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GATX 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.

The idea behind GATX Corporation and Alta Equipment Group 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.

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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.