Correlation Between Trinity Industries and Zeo Energy

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

By analyzing existing cross correlation between Trinity Industries and Zeo Energy Corp, you can compare the effects of market volatilities on Trinity Industries and Zeo Energy 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 Zeo Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trinity Industries and Zeo Energy.

Diversification Opportunities for Trinity Industries and Zeo Energy

0.7

Correlation Coefficient

Trinity Industries  Zeo Energy

Poor diversification

The 3 months correlation between Trinity and Zeo is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Trinity Industries and Zeo Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zeo Energy Corp 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 Zeo Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zeo Energy Corp has no effect on the direction of Trinity Industries i.e., Trinity Industries and Zeo Energy go up and down completely randomly.

Pair Corralation between Trinity Industries and Zeo Energy

Considering the 90-day investment horizon Trinity Industries is expected to generate 0.21 times more return on investment than Zeo Energy. However, Trinity Industries is 4.7 times less risky than Zeo Energy. It trades about -0.14 of its potential returns per unit of risk. Zeo Energy Corp is currently generating about -0.05 per unit of risk. If you would invest  3,520  in Trinity Industries on December 27, 2024 and sell it today you would lose (583.00) from holding Trinity Industries or give up 16.56% of portfolio value over 90 days.

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

Trinity Industries  vs.  Zeo Energy Corp

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.

Zeo Energy Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zeo Energy Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental 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.

Pair Trading with Trinity Industries and Zeo Energy

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

The idea behind Trinity Industries and Zeo Energy Corp 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.