Correlation Between GATX and Custom Truck

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

By analyzing existing cross correlation between GATX Corporation and Custom Truck One, you can compare the effects of market volatilities on GATX and Custom Truck 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 GATX with a short position of Custom Truck. Check out your portfolio center. Please also check ongoing floating volatility patterns of GATX and Custom Truck.

Diversification Opportunities for GATX and Custom Truck

0.71

Correlation Coefficient

GATX  Custom Truck

Poor diversification

The 3 months correlation between GATX and Custom is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding GATX Corp. and Custom Truck One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Custom Truck One and GATX 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 GATX Corporation are associated (or correlated) with Custom Truck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Custom Truck One has no effect on the direction of GATX i.e., GATX and Custom Truck go up and down completely randomly.

Pair Corralation between GATX and Custom Truck

Given the investment horizon of 90 days GATX is expected to generate 4.2 times less return on investment than Custom Truck. But when comparing it to its historical volatility, GATX Corporation is 1.77 times less risky than Custom Truck. It trades about 0.1 of its potential returns per unit of risk. Custom Truck One is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  395.00  in Custom Truck One on April 23, 2025 and sell it today you would earn a total of  178.00  from holding Custom Truck One or generate 45.06% return on investment over 90 days.

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

GATX Corp.  vs.  Custom Truck One

GATX

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GATX Corporation are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, GATX may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Custom Truck One

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Custom Truck One are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Custom Truck unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GATX and Custom Truck

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

The idea behind GATX Corporation and Custom Truck One 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.