Correlation Between Ag Growth and Textainer Group

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

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

Diversification Opportunities for Ag Growth and Textainer Group

-0.13

Correlation Coefficient

Ag Growth  Textainer Group

Good diversification

The 3 months correlation between AGGZF and Textainer is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Ag Growth 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 Ag Growth 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 Ag Growth 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 Ag Growth i.e., Ag Growth and Textainer Group go up and down completely randomly.

Pair Corralation between Ag Growth and Textainer Group

Assuming the 90 days horizon Ag Growth International is expected to under-perform the Textainer Group. But the pink sheet apears to be less risky and, when comparing its historical volatility, Ag Growth International is 4.65 times less risky than Textainer Group. The pink sheet trades about -0.33 of its potential returns per unit of risk. The Textainer Group Holdings is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  36.00  in Textainer Group Holdings on February 1, 2024 and sell it today you would earn a total of  14.00  from holding Textainer Group Holdings or generate 38.89% return on investment over 90 days.

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

Ag Growth International  vs.  Textainer Group Holdings

Ag Growth International

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ag Growth International are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Ag Growth is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Textainer Group Holdings

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Textainer Group Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal essential indicators, Textainer Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ag Growth and Textainer Group

The main advantage of trading using opposite Ag Growth and Textainer Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ag Growth 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 Ag Growth 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.