Correlation Between Triton International and Custom Truck

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Can any of the company-specific risk be diversified away by investing in both Triton International and Custom Truck 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 Custom Truck 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 Custom Truck One, you can compare the effects of market volatilities on Triton International and Custom Truck 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 Custom Truck. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triton International and Custom Truck.

Diversification Opportunities for Triton International and Custom Truck

-0.51
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Triton and Custom is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Triton International Limited and Custom Truck One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Custom Truck One 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 Custom Truck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Custom Truck One has no effect on the direction of Triton International i.e., Triton International and Custom Truck go up and down completely randomly.

Pair Corralation between Triton International and Custom Truck

Assuming the 90 days trading horizon Triton International Limited is expected to generate 0.26 times more return on investment than Custom Truck. However, Triton International Limited is 3.92 times less risky than Custom Truck. It trades about 0.02 of its potential returns per unit of risk. Custom Truck One is currently generating about 0.0 per unit of risk. If you would invest  2,367  in Triton International Limited on August 27, 2024 and sell it today you would earn a total of  74.00  from holding Triton International Limited or generate 3.13% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Triton International Limited  vs.  Custom Truck One

 Performance 
       Timeline  
Triton International 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Triton International Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Triton International is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
Custom Truck One 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Custom Truck One are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Custom Truck unveiled solid returns over the last few months and may actually be approaching a breakup point.

Triton International and Custom Truck Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Triton International and Custom Truck

The main advantage of trading using opposite Triton International and Custom Truck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triton International position performs unexpectedly, Custom Truck 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 Custom Truck will offset losses from the drop in Custom Truck's long position.
The idea behind Triton International Limited and Custom Truck One 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.
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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