Correlation Between TITAN MACHINERY and Global Payments
Can any of the company-specific risk be diversified away by investing in both TITAN MACHINERY and Global Payments 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 Global Payments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TITAN MACHINERY and Global Payments, you can compare the effects of market volatilities on TITAN MACHINERY and Global Payments 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 Global Payments. Check out your portfolio center. Please also check ongoing floating volatility patterns of TITAN MACHINERY and Global Payments.
Diversification Opportunities for TITAN MACHINERY and Global Payments
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TITAN and Global is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding TITAN MACHINERY and Global Payments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Payments 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 Global Payments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Payments has no effect on the direction of TITAN MACHINERY i.e., TITAN MACHINERY and Global Payments go up and down completely randomly.
Pair Corralation between TITAN MACHINERY and Global Payments
Assuming the 90 days trading horizon TITAN MACHINERY is expected to under-perform the Global Payments. In addition to that, TITAN MACHINERY is 1.6 times more volatile than Global Payments. It trades about -0.04 of its total potential returns per unit of risk. Global Payments is currently generating about 0.03 per unit of volatility. If you would invest 10,198 in Global Payments on September 14, 2024 and sell it today you would earn a total of 887.00 from holding Global Payments or generate 8.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TITAN MACHINERY vs. Global Payments
Performance |
| Timeline |
| TITAN MACHINERY |
| Global Payments |
TITAN MACHINERY and Global Payments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TITAN MACHINERY and Global Payments
The main advantage of trading using opposite TITAN MACHINERY and Global Payments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TITAN MACHINERY position performs unexpectedly, Global Payments 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 Global Payments will offset losses from the drop in Global Payments' long position.| TITAN MACHINERY vs. Apple Inc | TITAN MACHINERY vs. Apple Inc | TITAN MACHINERY vs. Apple Inc | TITAN MACHINERY vs. Apple Inc |
| Global Payments vs. Thai Beverage Public | Global Payments vs. TITAN MACHINERY | Global Payments vs. Fevertree Drinks PLC | Global Payments vs. Hanison Construction Holdings |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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