Correlation Between Triton International and AGL Energy

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

Diversification Opportunities for Triton International and AGL Energy

0.0

Correlation Coefficient

Triton International  AGL Energy

Pay attention - limited upside

The 3 months correlation between Triton and AGL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Triton International Limited and AGL Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGL Energy Limited 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 AGL Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGL Energy Limited has no effect on the direction of Triton International i.e., Triton International and AGL Energy go up and down completely randomly.

Pair Corralation between Triton International and AGL Energy

If you would invest  2,459  in Triton International Limited on September 12, 2024 and sell it today you would earn a total of  7.00  from holding Triton International Limited or generate 0.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Triton International Limited  vs.  AGL Energy Limited

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.

AGL Energy Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AGL Energy Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, AGL Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Triton International and AGL Energy

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

The idea behind Triton International Limited and AGL Energy 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.