Correlation Between Triton International and Aarons
Can any of the company-specific risk be diversified away by investing in both Triton International and Aarons 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 Triton International and Aarons into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Triton International Limited and The Aarons, you can compare the effects of market volatilities on Triton International and Aarons 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 Triton International with a short position of Aarons. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triton International and Aarons.
Diversification Opportunities for Triton International and Aarons
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Triton and Aarons is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Triton International Limited and The Aarons in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aarons and Triton International 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 Triton International Limited are associated (or correlated) with Aarons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aarons has no effect on the direction of Triton International i.e., Triton International and Aarons go up and down completely randomly.
Pair Corralation between Triton International and Aarons
If you would invest 2,481 in Triton International Limited on September 18, 2024 and sell it today you would earn a total of 39.00 from holding Triton International Limited or generate 1.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Triton International Limited vs. The Aarons
Performance |
| Timeline |
| Triton International |
| Aarons |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Triton International and Aarons Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Triton International and Aarons
The main advantage of trading using opposite Triton International and Aarons positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triton International position performs unexpectedly, Aarons 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 Aarons will offset losses from the drop in Aarons' long position.| Triton International vs. Triton International Limited | Triton International vs. Triton International Limited | Triton International vs. Triton International Limited | Triton International vs. Costamare |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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