Correlation Between Trinity Industries and USD Partners

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

By analyzing existing cross correlation between Trinity Industries and USD Partners LP, you can compare the effects of market volatilities on Trinity Industries and USD Partners 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 Trinity Industries with a short position of USD Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trinity Industries and USD Partners.

Diversification Opportunities for Trinity Industries and USD Partners

0.0

Correlation Coefficient

Trinity Industries  USD Partners

Pay attention - limited upside

The 3 months correlation between Trinity and USD is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Trinity Industries and USD Partners LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USD Partners LP and Trinity Industries 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 Trinity Industries are associated (or correlated) with USD Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USD Partners LP has no effect on the direction of Trinity Industries i.e., Trinity Industries and USD Partners go up and down completely randomly.

Pair Corralation between Trinity Industries and USD Partners

If you would invest (100.00) in USD Partners LP on December 27, 2024 and sell it today you would earn a total of  100.00  from holding USD Partners LP or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Trinity Industries  vs.  USD Partners LP

Trinity Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Trinity Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

USD Partners LP

Risk-Adjusted Performance

Very Weak

Over the last 90 days USD Partners LP has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, USD Partners 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 Trinity Industries and USD Partners

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

The idea behind Trinity Industries and USD Partners LP 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.