Correlation Between Elutia and Triton International

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

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

Diversification Opportunities for Elutia and Triton International

0.27

Correlation Coefficient

Elutia  Triton International

Modest diversification

The 3 months correlation between Elutia and Triton is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Elutia Inc and Triton International Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triton International and Elutia 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 Elutia Inc 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 Elutia i.e., Elutia and Triton International go up and down completely randomly.

Pair Corralation between Elutia and Triton International

Given the investment horizon of 90 days Elutia Inc is expected to generate 14.35 times more return on investment than Triton International. However, Elutia is 14.35 times more volatile than Triton International Limited. It trades about 0.01 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  381.00  in Elutia Inc on October 8, 2024 and sell it today you would lose (36.00) from holding Elutia Inc or give up 9.45% of portfolio value over 90 days.

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

Elutia Inc  vs.  Triton International Limited

Elutia Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elutia Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Elutia is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Triton International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Triton International Limited has generated negative risk-adjusted returns adding no value to investors with long positions. 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 Elutia and Triton International

The main advantage of trading using opposite Elutia and Triton International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elutia 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 Elutia Inc 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.

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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.