Correlation Between TITAN MACHINERY and Penn National
Can any of the company-specific risk be diversified away by investing in both TITAN MACHINERY and Penn National 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 Penn National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TITAN MACHINERY and Penn National Gaming, you can compare the effects of market volatilities on TITAN MACHINERY and Penn National 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 Penn National. Check out your portfolio center. Please also check ongoing floating volatility patterns of TITAN MACHINERY and Penn National.
Diversification Opportunities for TITAN MACHINERY and Penn National
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TITAN and Penn is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding TITAN MACHINERY and Penn National Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penn National Gaming 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 Penn National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penn National Gaming has no effect on the direction of TITAN MACHINERY i.e., TITAN MACHINERY and Penn National go up and down completely randomly.
Pair Corralation between TITAN MACHINERY and Penn National
Assuming the 90 days trading horizon TITAN MACHINERY is expected to generate 1.25 times more return on investment than Penn National. However, TITAN MACHINERY is 1.25 times more volatile than Penn National Gaming. It trades about 0.43 of its potential returns per unit of risk. Penn National Gaming is currently generating about 0.13 per unit of risk. If you would invest 1,340 in TITAN MACHINERY on November 4, 2024 and sell it today you would earn a total of 470.00 from holding TITAN MACHINERY or generate 35.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
TITAN MACHINERY vs. Penn National Gaming
Performance |
| Timeline |
| TITAN MACHINERY |
| Penn National Gaming |
TITAN MACHINERY and Penn National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TITAN MACHINERY and Penn National
The main advantage of trading using opposite TITAN MACHINERY and Penn National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TITAN MACHINERY position performs unexpectedly, Penn National 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 Penn National will offset losses from the drop in Penn National's long position.| TITAN MACHINERY vs. Cal Maine Foods | TITAN MACHINERY vs. Choice Hotels International | TITAN MACHINERY vs. Wyndham Hotels Resorts | TITAN MACHINERY vs. Park Hotels Resorts |
| Penn National vs. KIMBALL ELECTRONICS | Penn National vs. Singapore Telecommunications Limited | Penn National vs. Telecom Argentina SA | Penn National vs. Spirent Communications plc |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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