Correlation Between Herc Holdings and Triton International
Can any of the company-specific risk be diversified away by investing in both Herc 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 Herc 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 Herc Holdings and Triton International Group, you can compare the effects of market volatilities on Herc 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 Herc Holdings with a short position of Triton International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Herc Holdings and Triton International.
Diversification Opportunities for Herc Holdings and Triton International
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Herc and Triton is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Herc Holdings and Triton International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triton International and Herc 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 Herc Holdings 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 Herc Holdings i.e., Herc Holdings and Triton International go up and down completely randomly.
Pair Corralation between Herc Holdings and Triton International
Considering the 90-day investment horizon Herc Holdings is expected to generate 1.58 times less return on investment than Triton International. But when comparing it to its historical volatility, Herc Holdings is 1.1 times less risky than Triton International. It trades about 0.04 of its potential returns per unit of risk. Triton International Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 7,046 in Triton International Group on August 27, 2024 and sell it today you would earn a total of 1,401 from holding Triton International Group or generate 19.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 25.71% |
| Values | Daily Returns |
Herc Holdings vs. Triton International Group
Performance |
| Timeline |
| Herc Holdings |
| Triton International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Herc Holdings and Triton International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Herc Holdings and Triton International
The main advantage of trading using opposite Herc Holdings and Triton International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Herc 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.| Herc Holdings vs. PROG Holdings | Herc Holdings vs. McGrath RentCorp | Herc Holdings vs. Mega Matrix Corp | Herc Holdings vs. FTAI Aviation Ltd |
| Triton International vs. Custom Truck One | Triton International vs. PROG Holdings | Triton International vs. Air Lease | Triton International vs. HE Equipment Services |
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.
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