Correlation Between GATX and Yayyo

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

By analyzing existing cross correlation between GATX Corporation and Yayyo Inc, you can compare the effects of market volatilities on GATX and Yayyo 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 Yayyo. Check out your portfolio center. Please also check ongoing floating volatility patterns of GATX and Yayyo.

Diversification Opportunities for GATX and Yayyo

0.0

Correlation Coefficient

GATX  Yayyo

Pay attention - limited upside

The 3 months correlation between GATX and Yayyo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GATX Corp. and Yayyo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yayyo Inc 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 Yayyo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yayyo Inc has no effect on the direction of GATX i.e., GATX and Yayyo go up and down completely randomly.

Pair Corralation between GATX and Yayyo

If you would invest  15,463  in GATX Corporation on December 28, 2024 and sell it today you would earn a total of  458.00  from holding GATX Corporation or generate 2.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

GATX Corp.  vs.  Yayyo Inc

GATX

Risk-Adjusted Performance

Insignificant

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.

Yayyo Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Yayyo Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Yayyo is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with GATX and Yayyo

The main advantage of trading using opposite GATX and Yayyo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GATX position performs unexpectedly, Yayyo 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 Yayyo will offset losses from the drop in Yayyo's long position.

The idea behind GATX Corporation and Yayyo Inc 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.