Correlation Between Icon Energy and Triton International

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

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

Diversification Opportunities for Icon Energy and Triton International

0.27

Correlation Coefficient

Icon Energy  Triton International

Modest diversification

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

Pair Corralation between Icon Energy and Triton International

Given the investment horizon of 90 days Icon Energy Corp is expected to generate 10.97 times more return on investment than Triton International. However, Icon Energy is 10.97 times more volatile than Triton International Limited. It trades about 0.14 of its potential returns per unit of risk. Triton International Limited is currently generating about -0.01 per unit of risk. If you would invest  185.00  in Icon Energy Corp on September 13, 2024 and sell it today you would earn a total of  60.00  from holding Icon Energy Corp or generate 32.43% return on investment over 90 days.

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

Icon Energy Corp  vs.  Triton International Limited

Icon Energy Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Icon Energy Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Icon Energy may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 Icon Energy and Triton International

The main advantage of trading using opposite Icon Energy and Triton International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Energy 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 Icon Energy Corp 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.