Correlation Between Textainer Group and Grow Solutions

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

Diversification Opportunities for Textainer Group and Grow Solutions

0.0

Correlation Coefficient

Textainer Group  Grow Solutions

Pay attention - limited upside

The 3 months correlation between Textainer and Grow is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Textainer Group Holdings and Grow Solutions Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grow Solutions Holdings 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 Grow Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grow Solutions Holdings has no effect on the direction of Textainer Group i.e., Textainer Group and Grow Solutions go up and down completely randomly.

Pair Corralation between Textainer Group and Grow Solutions

If you would invest  37.00  in Textainer Group Holdings on March 5, 2024 and sell it today you would earn a total of  38.00  from holding Textainer Group Holdings or generate 102.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	44.44%
Values	Daily Returns

Textainer Group Holdings  vs.  Grow Solutions Holdings

Textainer Group Holdings

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Textainer Group Holdings are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, Textainer Group reported solid returns over the last few months and may actually be approaching a breakup point.

Grow Solutions Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grow Solutions Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Grow Solutions is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Textainer Group and Grow Solutions

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

The idea behind Textainer Group Holdings and Grow Solutions 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.