Correlation Between Triton International and Global Net
Can any of the company-specific risk be diversified away by investing in both Triton International and Global Net 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 Global Net 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 Global Net Lease, you can compare the effects of market volatilities on Triton International and Global Net 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 Global Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triton International and Global Net.
Diversification Opportunities for Triton International and Global Net
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Triton and Global is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Triton International Limited and Global Net Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Net Lease 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 Global Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Net Lease has no effect on the direction of Triton International i.e., Triton International and Global Net go up and down completely randomly.
Pair Corralation between Triton International and Global Net
Assuming the 90 days trading horizon Triton International is expected to generate 2.25 times less return on investment than Global Net. But when comparing it to its historical volatility, Triton International Limited is 1.6 times less risky than Global Net. It trades about 0.06 of its potential returns per unit of risk. Global Net Lease is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,703 in Global Net Lease on September 12, 2024 and sell it today you would earn a total of 592.00 from holding Global Net Lease or generate 34.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 89.2% |
| Values | Daily Returns |
Triton International Limited vs. Global Net Lease
Performance |
| Timeline |
| Triton International |
| Global Net Lease |
Triton International and Global Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Triton International and Global Net
The main advantage of trading using opposite Triton International and Global Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triton International position performs unexpectedly, Global Net 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 Global Net will offset losses from the drop in Global Net's long position.The idea behind Triton International Limited and Global Net Lease pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Global Net vs. Triton International Limited | Global Net vs. BBB Foods | Global Net vs. Avis Budget Group | Global Net vs. Bridgford Foods |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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