Correlation Between Triton International and Ameriprise Financial

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

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

Diversification Opportunities for Triton International and Ameriprise Financial

0.34

Correlation Coefficient

Triton International  Ameriprise Financial

Weak diversification

The 3 months correlation between Triton and Ameriprise is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Triton International Limited and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial and Triton International 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 Triton International Limited are associated (or correlated) with Ameriprise Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameriprise Financial has no effect on the direction of Triton International i.e., Triton International and Ameriprise Financial go up and down completely randomly.

Pair Corralation between Triton International and Ameriprise Financial

Assuming the 90 days trading horizon Triton International Limited is expected to generate 0.33 times more return on investment than Ameriprise Financial. However, Triton International Limited is 3.01 times less risky than Ameriprise Financial. It trades about 0.02 of its potential returns per unit of risk. Ameriprise Financial is currently generating about -0.08 per unit of risk. If you would invest  2,394  in Triton International Limited on December 30, 2024 and sell it today you would earn a total of  11.00  from holding Triton International Limited or generate 0.46% return on investment over 90 days.

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

Triton International Limited  vs.  Ameriprise Financial

Triton International

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Triton International Limited are ranked lower than 1 (%) 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.

Ameriprise Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ameriprise Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest abnormal performance, the Stock's primary indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Triton International and Ameriprise Financial

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

The idea behind Triton International Limited and Ameriprise Financial 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.