Correlation Between Ameriprise Financial and Triton International

Can any of the company-specific risk be diversified away by investing in both Ameriprise 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 Ameriprise 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 Ameriprise Financial and Triton International Limited, you can compare the effects of market volatilities on Ameriprise 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 Ameriprise Financial with a short position of Triton International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ameriprise Financial and Triton International.

Diversification Opportunities for Ameriprise Financial and Triton International

-0.17

Correlation Coefficient

Ameriprise Financial  Triton International

Good diversification

The 3 months correlation between Ameriprise and Triton is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Ameriprise Financial and Triton International Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triton International and Ameriprise 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 Ameriprise Financial 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 Ameriprise Financial i.e., Ameriprise Financial and Triton International go up and down completely randomly.

Pair Corralation between Ameriprise Financial and Triton International

Considering the 90-day investment horizon Ameriprise Financial is expected to generate 4.54 times more return on investment than Triton International. However, Ameriprise Financial is 4.54 times more volatile than Triton International Limited. It trades about 0.22 of its potential returns per unit of risk. Triton International Limited is currently generating about 0.2 per unit of risk. If you would invest  51,254  in Ameriprise Financial on August 31, 2024 and sell it today you would earn a total of  6,143  from holding Ameriprise Financial or generate 11.99% return on investment over 90 days.

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

Ameriprise Financial  vs.  Triton International Limited

Ameriprise Financial

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ameriprise Financial are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak primary indicators, Ameriprise Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Triton International

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Triton International Limited are ranked lower than 5 (%) 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 Ameriprise Financial and Triton International

The main advantage of trading using opposite Ameriprise Financial and Triton International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ameriprise 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 Ameriprise Financial 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.