Correlation Between Rev and Textainer Group

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

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

Diversification Opportunities for Rev and Textainer Group

-0.02

Correlation Coefficient

Rev  Textainer Group

Good diversification

The 3 months correlation between Rev and Textainer is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Rev Group and Textainer Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Textainer Group Holdings and Rev 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 Rev Group are associated (or correlated) with Textainer Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Textainer Group Holdings has no effect on the direction of Rev i.e., Rev and Textainer Group go up and down completely randomly.

Pair Corralation between Rev and Textainer Group

Given the investment horizon of 90 days Rev Group is expected to generate 0.82 times more return on investment than Textainer Group. However, Rev Group is 1.23 times less risky than Textainer Group. It trades about 0.13 of its potential returns per unit of risk. Textainer Group Holdings is currently generating about 0.07 per unit of risk. If you would invest  2,740  in Rev Group on September 14, 2024 and sell it today you would earn a total of  659.00  from holding Rev Group or generate 24.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Rev Group  vs.  Textainer Group Holdings

Rev Group

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rev Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Rev reported solid returns over the last few months and may actually be approaching a breakup point.

Textainer Group Holdings

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Textainer Group Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, Textainer Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Rev and Textainer Group

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

The idea behind Rev Group and Textainer Group Holdings 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.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.