Correlation Between TITAN MACHINERY and Xenia Hotels
Can any of the company-specific risk be diversified away by investing in both TITAN MACHINERY and Xenia Hotels 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 TITAN MACHINERY and Xenia Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TITAN MACHINERY and Xenia Hotels Resorts, you can compare the effects of market volatilities on TITAN MACHINERY and Xenia Hotels 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 TITAN MACHINERY with a short position of Xenia Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of TITAN MACHINERY and Xenia Hotels.
Diversification Opportunities for TITAN MACHINERY and Xenia Hotels
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TITAN and Xenia is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding TITAN MACHINERY and Xenia Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xenia Hotels Resorts and TITAN MACHINERY 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 TITAN MACHINERY are associated (or correlated) with Xenia Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xenia Hotels Resorts has no effect on the direction of TITAN MACHINERY i.e., TITAN MACHINERY and Xenia Hotels go up and down completely randomly.
Pair Corralation between TITAN MACHINERY and Xenia Hotels
Assuming the 90 days trading horizon TITAN MACHINERY is expected to generate 1.3 times more return on investment than Xenia Hotels. However, TITAN MACHINERY is 1.3 times more volatile than Xenia Hotels Resorts. It trades about -0.07 of its potential returns per unit of risk. Xenia Hotels Resorts is currently generating about -0.12 per unit of risk. If you would invest 1,400 in TITAN MACHINERY on October 15, 2024 and sell it today you would lose (50.00) from holding TITAN MACHINERY or give up 3.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TITAN MACHINERY vs. Xenia Hotels Resorts
Performance |
| Timeline |
| TITAN MACHINERY |
| Xenia Hotels Resorts |
TITAN MACHINERY and Xenia Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TITAN MACHINERY and Xenia Hotels
The main advantage of trading using opposite TITAN MACHINERY and Xenia Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TITAN MACHINERY position performs unexpectedly, Xenia Hotels 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 Xenia Hotels will offset losses from the drop in Xenia Hotels' long position.| TITAN MACHINERY vs. PLAYTIKA HOLDING DL 01 | TITAN MACHINERY vs. Playa Hotels Resorts | TITAN MACHINERY vs. ePlay Digital | TITAN MACHINERY vs. Gaming and Leisure |
| Xenia Hotels vs. CNVISION MEDIA | Xenia Hotels vs. Hollywood Bowl Group | Xenia Hotels vs. Townsquare Media | Xenia Hotels vs. PENN Entertainment |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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