Correlation Between Ashtead Gro and Triton International

Can any of the company-specific risk be diversified away by investing in both Ashtead Gro and Triton International 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 Ashtead Gro and Triton International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ashtead Gro and Triton International Limited, you can compare the effects of market volatilities on Ashtead Gro and Triton International 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 Ashtead Gro with a short position of Triton International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashtead Gro and Triton International.

Diversification Opportunities for Ashtead Gro and Triton International

0.13

Correlation Coefficient

Ashtead Gro  Triton International

Average diversification

The 3 months correlation between Ashtead and Triton is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Ashtead Gro and Triton International Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triton International and Ashtead Gro 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 Ashtead Gro are associated (or correlated) with Triton International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triton International has no effect on the direction of Ashtead Gro i.e., Ashtead Gro and Triton International go up and down completely randomly.

Pair Corralation between Ashtead Gro and Triton International

Assuming the 90 days horizon Ashtead Gro is expected to generate 3.39 times more return on investment than Triton International. However, Ashtead Gro is 3.39 times more volatile than Triton International Limited. It trades about 0.04 of its potential returns per unit of risk. Triton International Limited is currently generating about 0.06 per unit of risk. If you would invest  23,158  in Ashtead Gro on September 2, 2024 and sell it today you would earn a total of  9,486  from holding Ashtead Gro or generate 40.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Ashtead Gro  vs.  Triton International Limited

Ashtead Gro

Risk-Adjusted Performance

11 of 100

Good

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

Triton International

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Triton International Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Triton International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ashtead Gro and Triton International

The main advantage of trading using opposite Ashtead Gro and Triton International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashtead Gro position performs unexpectedly, Triton International 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 Triton International will offset losses from the drop in Triton International's long position.

The idea behind Ashtead Gro and Triton International Limited 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.