Correlation Between Trinity Industries and Greenbrier Companies
Can any of the company-specific risk be diversified away by investing in both Trinity Industries and Greenbrier Companies 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 Trinity Industries and Greenbrier Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trinity Industries and Greenbrier Companies, you can compare the effects of market volatilities on Trinity Industries and Greenbrier Companies 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 Trinity Industries with a short position of Greenbrier Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trinity Industries and Greenbrier Companies.
Diversification Opportunities for Trinity Industries and Greenbrier Companies
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Trinity and Greenbrier is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Trinity Industries and Greenbrier Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenbrier Companies and Trinity Industries 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 Trinity Industries are associated (or correlated) with Greenbrier Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenbrier Companies has no effect on the direction of Trinity Industries i.e., Trinity Industries and Greenbrier Companies go up and down completely randomly.
Pair Corralation between Trinity Industries and Greenbrier Companies
Considering the 90-day investment horizon Trinity Industries is expected to generate 1.16 times less return on investment than Greenbrier Companies. But when comparing it to its historical volatility, Trinity Industries is 1.13 times less risky than Greenbrier Companies. It trades about 0.08 of its potential returns per unit of risk. Greenbrier Companies is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 5,205 in Greenbrier Companies on August 24, 2024 and sell it today you would earn a total of 1,390 from holding Greenbrier Companies or generate 26.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trinity Industries vs. Greenbrier Companies
Performance |
| Timeline |
| Trinity Industries |
| Greenbrier Companies |
Trinity Industries and Greenbrier Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trinity Industries and Greenbrier Companies
The main advantage of trading using opposite Trinity Industries and Greenbrier Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trinity Industries position performs unexpectedly, Greenbrier Companies 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 Greenbrier Companies will offset losses from the drop in Greenbrier Companies' long position.| Trinity Industries vs. LB Foster | Trinity Industries vs. Freightcar America | Trinity Industries vs. Westinghouse Air Brake | Trinity Industries vs. Norfolk Southern |
| Greenbrier Companies vs. LB Foster | Greenbrier Companies vs. Freightcar America | Greenbrier Companies vs. Westinghouse Air Brake | Greenbrier Companies vs. CSX Corporation |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |