Correlation Between HyreCar and McGrath RentCorp

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

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

Diversification Opportunities for HyreCar and McGrath RentCorp

-0.76

Correlation Coefficient

HyreCar  McGrath RentCorp

Pay attention - limited upside

The 3 months correlation between HyreCar and McGrath is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding HyreCar and McGrath RentCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McGrath RentCorp and HyreCar 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 HyreCar are associated (or correlated) with McGrath RentCorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McGrath RentCorp has no effect on the direction of HyreCar i.e., HyreCar and McGrath RentCorp go up and down completely randomly.

Pair Corralation between HyreCar and McGrath RentCorp

Assuming the 90 days horizon HyreCar is expected to under-perform the McGrath RentCorp. In addition to that, HyreCar is 6.74 times more volatile than McGrath RentCorp. It trades about -0.13 of its total potential returns per unit of risk. McGrath RentCorp is currently generating about 0.14 per unit of volatility. If you would invest  10,175  in McGrath RentCorp on September 17, 2024 and sell it today you would earn a total of  1,759  from holding McGrath RentCorp or generate 17.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.92%
Values	Daily Returns

HyreCar  vs.  McGrath RentCorp

HyreCar

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HyreCar has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

McGrath RentCorp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in McGrath RentCorp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, McGrath RentCorp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HyreCar and McGrath RentCorp

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

The idea behind HyreCar and McGrath RentCorp 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.