Correlation Between TITAN MACHINERY and CIFI Holdings
Can any of the company-specific risk be diversified away by investing in both TITAN MACHINERY and CIFI Holdings 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 CIFI Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TITAN MACHINERY and CIFI Holdings Co, you can compare the effects of market volatilities on TITAN MACHINERY and CIFI Holdings 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 CIFI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of TITAN MACHINERY and CIFI Holdings.
Diversification Opportunities for TITAN MACHINERY and CIFI Holdings
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between TITAN and CIFI is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding TITAN MACHINERY and CIFI Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIFI Holdings 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 CIFI Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIFI Holdings has no effect on the direction of TITAN MACHINERY i.e., TITAN MACHINERY and CIFI Holdings go up and down completely randomly.
Pair Corralation between TITAN MACHINERY and CIFI Holdings
Assuming the 90 days trading horizon TITAN MACHINERY is expected to under-perform the CIFI Holdings. But the stock apears to be less risky and, when comparing its historical volatility, TITAN MACHINERY is 3.49 times less risky than CIFI Holdings. The stock trades about -0.04 of its potential returns per unit of risk. The CIFI Holdings Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 11.00 in CIFI Holdings Co on September 14, 2024 and sell it today you would lose (7.60) from holding CIFI Holdings Co or give up 69.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TITAN MACHINERY vs. CIFI Holdings Co
Performance |
| Timeline |
| TITAN MACHINERY |
| CIFI Holdings |
TITAN MACHINERY and CIFI Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TITAN MACHINERY and CIFI Holdings
The main advantage of trading using opposite TITAN MACHINERY and CIFI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TITAN MACHINERY position performs unexpectedly, CIFI Holdings 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 CIFI Holdings will offset losses from the drop in CIFI Holdings' long position.| TITAN MACHINERY vs. Apple Inc | TITAN MACHINERY vs. Apple Inc | TITAN MACHINERY vs. Apple Inc | TITAN MACHINERY vs. Apple Inc |
| CIFI Holdings vs. GEELY AUTOMOBILE | CIFI Holdings vs. North American Construction | CIFI Holdings vs. TITAN MACHINERY | CIFI Holdings vs. Chongqing Machinery Electric |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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