Correlation Between AmTrust Financial and Triton International

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

By analyzing existing cross correlation between AmTrust Financial Services and Triton International Limited, you can compare the effects of market volatilities on AmTrust Financial and Triton International 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 AmTrust Financial with a short position of Triton International. Check out your portfolio center. Please also check ongoing floating volatility patterns of AmTrust Financial and Triton International.

Diversification Opportunities for AmTrust Financial and Triton International

-0.09

Correlation Coefficient

AmTrust Financial  Triton International

Good diversification

The 3 months correlation between AmTrust and Triton is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding AmTrust Financial Services and Triton International Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triton International and AmTrust Financial 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 AmTrust Financial Services are associated (or correlated) with Triton International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triton International has no effect on the direction of AmTrust Financial i.e., AmTrust Financial and Triton International go up and down completely randomly.

Pair Corralation between AmTrust Financial and Triton International

Assuming the 90 days horizon AmTrust Financial Services is expected to generate 3.3 times more return on investment than Triton International. However, AmTrust Financial is 3.3 times more volatile than Triton International Limited. It trades about 0.09 of its potential returns per unit of risk. Triton International Limited is currently generating about 0.02 per unit of risk. If you would invest  1,359  in AmTrust Financial Services on December 30, 2024 and sell it today you would earn a total of  141.00  from holding AmTrust Financial Services or generate 10.38% return on investment over 90 days.

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

AmTrust Financial Services  vs.  Triton International Limited

AmTrust Financial

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AmTrust Financial Services are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating forward indicators, AmTrust Financial may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Triton International

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Triton International Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Triton International is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with AmTrust Financial and Triton International

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

The idea behind AmTrust Financial Services and Triton International Limited 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.

Check out your portfolio center.

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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.