Correlation Between Uber Technologies and Triton International

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

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

Diversification Opportunities for Uber Technologies and Triton International

-0.13

Correlation Coefficient

Uber Technologies  Triton International

Good diversification

The 3 months correlation between Uber and Triton is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and Triton International Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triton International and Uber Technologies 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 Uber Technologies 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 Uber Technologies i.e., Uber Technologies and Triton International go up and down completely randomly.

Pair Corralation between Uber Technologies and Triton International

Given the investment horizon of 90 days Uber Technologies is expected to generate 4.69 times more return on investment than Triton International. However, Uber Technologies is 4.69 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 0.03 per unit of risk. If you would invest  6,156  in Uber Technologies on December 26, 2024 and sell it today you would earn a total of  1,405  from holding Uber Technologies or generate 22.82% return on investment over 90 days.

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

Uber Technologies  vs.  Triton International Limited

Uber Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Uber Technologies are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating technical and fundamental indicators, Uber Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

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 2 (%) 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.

Pair Trading with Uber Technologies and Triton International

The main advantage of trading using opposite Uber Technologies and Triton International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uber Technologies 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 Uber Technologies 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.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.