Correlation Between LSI Software and Triton Development

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

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

Diversification Opportunities for LSI Software and Triton Development

0.82

Correlation Coefficient

LSI Software  Triton Development

Very poor diversification

The 3 months correlation between LSI and Triton is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding LSI Software SA and Triton Development SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triton Development and LSI Software 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 LSI Software SA are associated (or correlated) with Triton Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triton Development has no effect on the direction of LSI Software i.e., LSI Software and Triton Development go up and down completely randomly.

Pair Corralation between LSI Software and Triton Development

Assuming the 90 days trading horizon LSI Software SA is expected to generate 0.78 times more return on investment than Triton Development. However, LSI Software SA is 1.28 times less risky than Triton Development. It trades about 0.24 of its potential returns per unit of risk. Triton Development SA is currently generating about 0.11 per unit of risk. If you would invest  1,580  in LSI Software SA on April 24, 2025 and sell it today you would earn a total of  940.00  from holding LSI Software SA or generate 59.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

LSI Software SA  vs.  Triton Development SA

LSI Software SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in LSI Software SA are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, LSI Software reported solid returns over the last few months and may actually be approaching a breakup point.

Triton Development

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Triton Development SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Triton Development reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LSI Software and Triton Development

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

The idea behind LSI Software SA and Triton Development SA 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .