Correlation Between Triton International and Air Lease
Can any of the company-specific risk be diversified away by investing in both Triton International and Air 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 Air 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 Air Lease, you can compare the effects of market volatilities on Triton International and Air 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 Air Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triton International and Air Lease.
Diversification Opportunities for Triton International and Air Lease
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Triton and Air is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Triton International Limited and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air 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 Air Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Lease has no effect on the direction of Triton International i.e., Triton International and Air Lease go up and down completely randomly.
Pair Corralation between Triton International and Air Lease
Assuming the 90 days trading horizon Triton International is expected to generate 1.38 times less return on investment than Air Lease. In addition to that, Triton International is 1.71 times more volatile than Air Lease. It trades about 0.02 of its total potential returns per unit of risk. Air Lease is currently generating about 0.04 per unit of volatility. If you would invest 2,094 in Air Lease on February 14, 2024 and sell it today you would earn a total of 464.00 from holding Air Lease or generate 22.16% 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. Air Lease
Performance |
Timeline |
Triton International |
Air Lease |
Triton International and Air Lease Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Triton International and Air Lease
The main advantage of trading using opposite Triton International and Air Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triton International position performs unexpectedly, Air 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 Air Lease will offset losses from the drop in Air Lease's long position.Triton International vs. Ryder System | Triton International vs. Air Lease | Triton International vs. Vestis | Triton International vs. Willis Lease Finance |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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