Correlation Between Triton International and TFI International

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

Diversification Opportunities for Triton International and TFI International

0.27

Correlation Coefficient

Triton International  TFI International

Modest diversification

The 3 months correlation between Triton and TFI is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Triton International Limited and TFI International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TFI International 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 TFI International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TFI International has no effect on the direction of Triton International i.e., Triton International and TFI International go up and down completely randomly.

Pair Corralation between Triton International and TFI International

Assuming the 90 days trading horizon Triton International Limited is expected to under-perform the TFI International. But the preferred stock apears to be less risky and, when comparing its historical volatility, Triton International Limited is 3.87 times less risky than TFI International. The preferred stock trades about -0.02 of its potential returns per unit of risk. The TFI International is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  13,746  in TFI International on September 27, 2024 and sell it today you would earn a total of  389.00  from holding TFI International or generate 2.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Triton International Limited  vs.  TFI International

Triton International

Risk-Adjusted Performance

0 of 100

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 current stock price tumult, may contribute to shorter-term losses for the shareholders.

TFI International

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TFI International are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, TFI International is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Triton International and TFI International

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

The idea behind Triton International Limited and TFI International 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.

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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.