Correlation Between Triton International and 01609WAY8

Can any of the company-specific risk be diversified away by investing in both Triton International and 01609WAY8 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 01609WAY8 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 BABA 27 09 FEB 41, you can compare the effects of market volatilities on Triton International and 01609WAY8 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 01609WAY8. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triton International and 01609WAY8.

Diversification Opportunities for Triton International and 01609WAY8

-0.15

Correlation Coefficient

Triton International  01609WAY8

Good diversification

The 3 months correlation between Triton and 01609WAY8 is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Triton International Limited and BABA 27 09 FEB 41 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BABA 27 09 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 01609WAY8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BABA 27 09 has no effect on the direction of Triton International i.e., Triton International and 01609WAY8 go up and down completely randomly.

Pair Corralation between Triton International and 01609WAY8

Assuming the 90 days trading horizon Triton International Limited is expected to generate 0.09 times more return on investment than 01609WAY8. However, Triton International Limited is 10.65 times less risky than 01609WAY8. It trades about 0.0 of its potential returns per unit of risk. BABA 27 09 FEB 41 is currently generating about -0.01 per unit of risk. If you would invest  2,479  in Triton International Limited on September 14, 2024 and sell it today you would lose (3.00) from holding Triton International Limited or give up 0.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	66.67%
Values	Daily Returns

Triton International Limited  vs.  BABA 27 09 FEB 41

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.

BABA 27 09

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BABA 27 09 FEB 41 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 01609WAY8 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Triton International and 01609WAY8

The main advantage of trading using opposite Triton International and 01609WAY8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triton International position performs unexpectedly, 01609WAY8 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 01609WAY8 will offset losses from the drop in 01609WAY8's long position.

The idea behind Triton International Limited and BABA 27 09 FEB 41 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.