Correlation Between Triton International and Willis Lease
Can any of the company-specific risk be diversified away by investing in both Triton International and Willis Lease 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 Willis Lease 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 Willis Lease Finance, you can compare the effects of market volatilities on Triton International and Willis Lease 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 Willis Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triton International and Willis Lease.
Diversification Opportunities for Triton International and Willis Lease
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Triton and Willis is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Triton International Limited and Willis Lease Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Willis Lease Finance 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 Willis Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Willis Lease Finance has no effect on the direction of Triton International i.e., Triton International and Willis Lease go up and down completely randomly.
Pair Corralation between Triton International and Willis Lease
Assuming the 90 days trading horizon Triton International Limited is expected to under-perform the Willis Lease. But the preferred stock apears to be less risky and, when comparing its historical volatility, Triton International Limited is 2.21 times less risky than Willis Lease. The preferred stock trades about -0.17 of its potential returns per unit of risk. The Willis Lease Finance is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 18,975 in Willis Lease Finance on September 18, 2024 and sell it today you would earn a total of 2,376 from holding Willis Lease Finance or generate 12.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Triton International Limited vs. Willis Lease Finance
Performance |
| Timeline |
| Triton International |
| Willis Lease Finance |
Triton International and Willis Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Triton International and Willis Lease
The main advantage of trading using opposite Triton International and Willis Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triton International position performs unexpectedly, Willis Lease 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 Willis Lease will offset losses from the drop in Willis Lease's long position.| Triton International vs. Ryder System | Triton International vs. Air Lease | Triton International vs. Vestis | Triton International vs. Willis Lease Finance |
| Willis Lease vs. McGrath RentCorp | Willis Lease vs. Custom Truck One | Willis Lease vs. Alta Equipment Group | Willis Lease vs. PROG Holdings |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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