Correlation Between TMST Old and GATX

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Can any of the company-specific risk be diversified away by investing in both TMST Old and GATX 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 TMST Old and GATX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TMST Old and GATX Corporation, you can compare the effects of market volatilities on TMST Old and GATX 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 TMST Old with a short position of GATX. Check out your portfolio center. Please also check ongoing floating volatility patterns of TMST Old and GATX.

Diversification Opportunities for TMST Old and GATX

-0.12
  Correlation Coefficient

Good diversification

The 3 months correlation between TMST and GATX is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding TMST Old and GATX Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GATX and TMST Old 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 TMST Old are associated (or correlated) with GATX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GATX has no effect on the direction of TMST Old i.e., TMST Old and GATX go up and down completely randomly.

Pair Corralation between TMST Old and GATX

If you would invest  12,461  in GATX Corporation on December 30, 2023 and sell it today you would earn a total of  942.00  from holding GATX Corporation or generate 7.56% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy4.55%
ValuesDaily Returns

TMST Old  vs.  GATX Corp.

 Performance 
       Timeline  
TMST Old 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days TMST Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
GATX 

Risk-Adjusted Performance

10 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in GATX Corporation are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, GATX may actually be approaching a critical reversion point that can send shares even higher in April 2024.

TMST Old and GATX Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with TMST Old and GATX

The main advantage of trading using opposite TMST Old and GATX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TMST Old position performs unexpectedly, GATX 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 GATX will offset losses from the drop in GATX's long position.
The idea behind TMST Old and GATX Corporation 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

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