Correlation Between Triton International and Lennar

Can any of the company-specific risk be diversified away by investing in both Triton International and Lennar 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 Lennar 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 Lennar 475 percent, you can compare the effects of market volatilities on Triton International and Lennar 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 Lennar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triton International and Lennar.

Diversification Opportunities for Triton International and Lennar

0.28

Correlation Coefficient

Triton International  Lennar

Modest diversification

The 3 months correlation between Triton and Lennar is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Triton International Limited and Lennar 475 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lennar 475 percent 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 Lennar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lennar 475 percent has no effect on the direction of Triton International i.e., Triton International and Lennar go up and down completely randomly.

Pair Corralation between Triton International and Lennar

Assuming the 90 days trading horizon Triton International Limited is expected to under-perform the Lennar. But the preferred stock apears to be less risky and, when comparing its historical volatility, Triton International Limited is 1.02 times less risky than Lennar. The preferred stock trades about -0.21 of its potential returns per unit of risk. The Lennar 475 percent is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  10,042  in Lennar 475 percent on September 28, 2024 and sell it today you would earn a total of  28.00  from holding Lennar 475 percent or generate 0.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Triton International Limited  vs.  Lennar 475 percent

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

Lennar 475 percent

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lennar 475 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Lennar is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Triton International and Lennar

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

The idea behind Triton International Limited and Lennar 475 percent 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.