Correlation Between AerCap Holdings and Triton International
Can any of the company-specific risk be diversified away by investing in both AerCap Holdings 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 AerCap Holdings and Triton International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AerCap Holdings NV and Triton International Limited, you can compare the effects of market volatilities on AerCap Holdings 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 AerCap Holdings with a short position of Triton International. Check out your portfolio center. Please also check ongoing floating volatility patterns of AerCap Holdings and Triton International.
Diversification Opportunities for AerCap Holdings and Triton International
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AerCap and Triton is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding AerCap Holdings NV and Triton International Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triton International and AerCap Holdings 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 AerCap Holdings NV 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 AerCap Holdings i.e., AerCap Holdings and Triton International go up and down completely randomly.
Pair Corralation between AerCap Holdings and Triton International
Considering the 90-day investment horizon AerCap Holdings NV is expected to generate 1.17 times more return on investment than Triton International. However, AerCap Holdings is 1.17 times more volatile than Triton International Limited. It trades about 0.07 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 5,976 in AerCap Holdings NV on August 26, 2024 and sell it today you would earn a total of 3,827 from holding AerCap Holdings NV or generate 64.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AerCap Holdings NV vs. Triton International Limited
Performance |
| Timeline |
| AerCap Holdings NV |
| Triton International |
AerCap Holdings and Triton International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AerCap Holdings and Triton International
The main advantage of trading using opposite AerCap Holdings and Triton International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AerCap Holdings 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.| AerCap Holdings vs. Ryder System | AerCap Holdings vs. Alta Equipment Group | AerCap Holdings vs. PROG Holdings | AerCap Holdings vs. GATX Corporation |
| Triton International vs. Triton International Limited | Triton International vs. Triton International Limited |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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