Correlation Between Textainer Group and Arts Way

Can any of the company-specific risk be diversified away by investing in both Textainer Group and Arts Way 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 Arts Way 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 Arts Way Manufacturing Co, you can compare the effects of market volatilities on Textainer Group and Arts Way 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 Arts Way. Check out your portfolio center. Please also check ongoing floating volatility patterns of Textainer Group and Arts Way.

Diversification Opportunities for Textainer Group and Arts Way

-0.59

Correlation Coefficient

Textainer Group  Arts Way

Excellent diversification

The 3 months correlation between Textainer and Arts is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Textainer Group Holdings and Arts Way Manufacturing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arts Way Manufacturing 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 Arts Way. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arts Way Manufacturing has no effect on the direction of Textainer Group i.e., Textainer Group and Arts Way go up and down completely randomly.

Pair Corralation between Textainer Group and Arts Way

Assuming the 90 days horizon Textainer Group Holdings is expected to generate 1.71 times more return on investment than Arts Way. However, Textainer Group is 1.71 times more volatile than Arts Way Manufacturing Co. It trades about 0.07 of its potential returns per unit of risk. Arts Way Manufacturing Co is currently generating about -0.1 per unit of risk. If you would invest  74.00  in Textainer Group Holdings on September 3, 2024 and sell it today you would earn a total of  10.00  from holding Textainer Group Holdings or generate 13.51% return on investment over 90 days.

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

Textainer Group Holdings  vs.  Arts Way Manufacturing Co

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.

Arts Way Manufacturing

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arts Way Manufacturing Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Textainer Group and Arts Way

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

The idea behind Textainer Group Holdings and Arts Way Manufacturing Co 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 Commodity Directory module to find actively traded commodities issued by global exchanges.