Correlation Between Beam Global and Trinity Industries
Can any of the company-specific risk be diversified away by investing in both Beam Global and Trinity Industries 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 Beam Global and Trinity Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beam Global and Trinity Industries, you can compare the effects of market volatilities on Beam Global and Trinity Industries 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 Beam Global with a short position of Trinity Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beam Global and Trinity Industries.
Diversification Opportunities for Beam Global and Trinity Industries
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Beam and Trinity is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Beam Global and Trinity Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trinity Industries and Beam Global 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 Beam Global are associated (or correlated) with Trinity Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trinity Industries has no effect on the direction of Beam Global i.e., Beam Global and Trinity Industries go up and down completely randomly.
Pair Corralation between Beam Global and Trinity Industries
Given the investment horizon of 90 days Beam Global is expected to under-perform the Trinity Industries. In addition to that, Beam Global is 1.25 times more volatile than Trinity Industries. It trades about -0.38 of its total potential returns per unit of risk. Trinity Industries is currently generating about 0.09 per unit of volatility. If you would invest 3,564 in Trinity Industries on August 30, 2024 and sell it today you would earn a total of 181.00 from holding Trinity Industries or generate 5.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beam Global vs. Trinity Industries
Performance |
| Timeline |
| Beam Global |
| Trinity Industries |
Beam Global and Trinity Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beam Global and Trinity Industries
The main advantage of trading using opposite Beam Global and Trinity Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beam Global position performs unexpectedly, Trinity Industries 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 Trinity Industries will offset losses from the drop in Trinity Industries' long position.| Beam Global vs. Sunrun Inc | Beam Global vs. Emeren Group | Beam Global vs. Sunnova Energy International | Beam Global vs. Maxeon Solar Technologies |
| Trinity Industries vs. LB Foster | Trinity Industries vs. Freightcar America | Trinity Industries vs. Westinghouse Air Brake | Trinity Industries vs. Norfolk Southern |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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