Correlation Between American Axle and Triton International
Can any of the company-specific risk be diversified away by investing in both American Axle 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 American Axle and Triton International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Axle Manufacturing and Triton International Limited, you can compare the effects of market volatilities on American Axle 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 American Axle with a short position of Triton International. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Axle and Triton International.
Diversification Opportunities for American Axle and Triton International
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between American and Triton is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding American Axle Manufacturing and Triton International Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triton International and American Axle 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 American Axle Manufacturing 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 American Axle i.e., American Axle and Triton International go up and down completely randomly.
Pair Corralation between American Axle and Triton International
Considering the 90-day investment horizon American Axle Manufacturing is expected to generate 5.23 times more return on investment than Triton International. However, American Axle is 5.23 times more volatile than Triton International Limited. It trades about 0.08 of its potential returns per unit of risk. Triton International Limited is currently generating about 0.05 per unit of risk. If you would invest 618.00 in American Axle Manufacturing on August 30, 2024 and sell it today you would earn a total of 52.00 from holding American Axle Manufacturing or generate 8.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Axle Manufacturing vs. Triton International Limited
Performance |
| Timeline |
| American Axle Manufa |
| Triton International |
American Axle and Triton International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Axle and Triton International
The main advantage of trading using opposite American Axle and Triton International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Axle 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.| American Axle vs. Lear Corporation | American Axle vs. Commercial Vehicle Group | American Axle vs. Adient PLC | American Axle vs. Gentex |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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