Correlation Between Triton International and AerCap Holdings
Can any of the company-specific risk be diversified away by investing in both Triton International and AerCap Holdings 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 AerCap Holdings 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 AerCap Holdings NV, you can compare the effects of market volatilities on Triton International and AerCap Holdings 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 AerCap Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triton International and AerCap Holdings.
Diversification Opportunities for Triton International and AerCap Holdings
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Triton and AerCap is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Triton International Limited and AerCap Holdings NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerCap Holdings NV 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 AerCap Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AerCap Holdings NV has no effect on the direction of Triton International i.e., Triton International and AerCap Holdings go up and down completely randomly.
Pair Corralation between Triton International and AerCap Holdings
Assuming the 90 days trading horizon Triton International is expected to generate 31.5 times less return on investment than AerCap Holdings. But when comparing it to its historical volatility, Triton International Limited is 6.29 times less risky than AerCap Holdings. It trades about 0.03 of its potential returns per unit of risk. AerCap Holdings NV is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 9,547 in AerCap Holdings NV on August 30, 2024 and sell it today you would earn a total of 483.00 from holding AerCap Holdings NV or generate 5.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Triton International Limited vs. AerCap Holdings NV
Performance |
| Timeline |
| Triton International |
| AerCap Holdings NV |
Triton International and AerCap Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Triton International and AerCap Holdings
The main advantage of trading using opposite Triton International and AerCap Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triton International position performs unexpectedly, AerCap Holdings 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 AerCap Holdings will offset losses from the drop in AerCap Holdings' long position.| Triton International vs. Triton International Limited | Triton International vs. Triton International Limited | Triton International vs. Triton International Limited | Triton International vs. Costamare |
| AerCap Holdings vs. Ryder System | AerCap Holdings vs. Alta Equipment Group | AerCap Holdings vs. PROG Holdings | AerCap Holdings vs. GATX 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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