Correlation Between AmeraMex International and Textainer Group

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

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

Diversification Opportunities for AmeraMex International and Textainer Group

-0.01

Correlation Coefficient

AmeraMex International  Textainer Group

Good diversification

The 3 months correlation between AmeraMex and Textainer is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding AmeraMex International 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 AmeraMex International 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 AmeraMex International 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 AmeraMex International i.e., AmeraMex International and Textainer Group go up and down completely randomly.

Pair Corralation between AmeraMex International and Textainer Group

Given the investment horizon of 90 days AmeraMex International is expected to generate 3.23 times more return on investment than Textainer Group. However, AmeraMex International is 3.23 times more volatile than Textainer Group Holdings. It trades about 0.05 of its potential returns per unit of risk. Textainer Group Holdings is currently generating about 0.08 per unit of risk. If you would invest  24.00  in AmeraMex International on August 31, 2024 and sell it today you would lose (2.00) from holding AmeraMex International or give up 8.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.73%
Values	Daily Returns

AmeraMex International  vs.  Textainer Group Holdings

AmeraMex International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AmeraMex International 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 primary indicators remain fairly strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Textainer Group Holdings

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Textainer Group Holdings are ranked lower than 6 (%) 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 AmeraMex International and Textainer Group

The main advantage of trading using opposite AmeraMex International and Textainer Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AmeraMex International 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 AmeraMex International 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.

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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.