Correlation Between Falcons Beyond and Trinity Industries

Can any of the company-specific risk be diversified away by investing in both Falcons Beyond and Trinity Industries 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 Falcons Beyond and Trinity Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Falcons Beyond Global, and Trinity Industries, you can compare the effects of market volatilities on Falcons Beyond and Trinity Industries 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 Falcons Beyond with a short position of Trinity Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcons Beyond and Trinity Industries.

Diversification Opportunities for Falcons Beyond and Trinity Industries

0.59

Correlation Coefficient

Falcons Beyond  Trinity Industries

Very weak diversification

The 3 months correlation between Falcons and Trinity is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Falcons Beyond Global, and Trinity Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trinity Industries and Falcons Beyond 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 Falcons Beyond Global, are associated (or correlated) with Trinity Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trinity Industries has no effect on the direction of Falcons Beyond i.e., Falcons Beyond and Trinity Industries go up and down completely randomly.

Pair Corralation between Falcons Beyond and Trinity Industries

Assuming the 90 days horizon Falcons Beyond Global, is expected to under-perform the Trinity Industries. In addition to that, Falcons Beyond is 13.29 times more volatile than Trinity Industries. It trades about -0.03 of its total potential returns per unit of risk. Trinity Industries is currently generating about 0.0 per unit of volatility. If you would invest  2,441  in Trinity Industries on May 5, 2025 and sell it today you would lose (25.00) from holding Trinity Industries or give up 1.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	26.98%
Values	Daily Returns

Falcons Beyond Global,  vs.  Trinity Industries

Falcons Beyond Global,

Risk-Adjusted Performance

Very Weak

Over the last 90 days Falcons Beyond Global, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's fundamental indicators remain fairly stable which may send shares a bit higher in September 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Trinity Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Trinity Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Trinity Industries is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Falcons Beyond and Trinity Industries

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

The idea behind Falcons Beyond Global, and Trinity Industries 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.