Correlation Between GATX and Landstar System

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

By analyzing existing cross correlation between GATX Corporation and Landstar System, you can compare the effects of market volatilities on GATX and Landstar System 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 Landstar System. Check out your portfolio center. Please also check ongoing floating volatility patterns of GATX and Landstar System.

Diversification Opportunities for GATX and Landstar System

0.48

Correlation Coefficient

GATX  Landstar System

Very weak diversification

The 3 months correlation between GATX and Landstar is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding GATX Corp. and Landstar System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Landstar System 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 Landstar System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Landstar System has no effect on the direction of GATX i.e., GATX and Landstar System go up and down completely randomly.

Pair Corralation between GATX and Landstar System

Given the investment horizon of 90 days GATX Corporation is expected to generate 0.87 times more return on investment than Landstar System. However, GATX Corporation is 1.15 times less risky than Landstar System. It trades about 0.03 of its potential returns per unit of risk. Landstar System is currently generating about -0.04 per unit of risk. If you would invest  14,657  in GATX Corporation on May 5, 2025 and sell it today you would earn a total of  266.00  from holding GATX Corporation or generate 1.81% return on investment over 90 days.

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

GATX Corp.  vs.  Landstar System

GATX

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GATX Corporation are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, GATX is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Landstar System

Risk-Adjusted Performance

Very Weak

Over the last 90 days Landstar System has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Landstar System is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with GATX and Landstar System

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

The idea behind GATX Corporation and Landstar System 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.