Correlation Between Titan Machinery and Corsair Gaming

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Can any of the company-specific risk be diversified away by investing in both Titan Machinery and Corsair Gaming 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 Corsair Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Titan Machinery and Corsair Gaming, you can compare the effects of market volatilities on Titan Machinery and Corsair Gaming 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 Corsair Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Titan Machinery and Corsair Gaming.

Diversification Opportunities for Titan Machinery and Corsair Gaming

0.66
  Correlation Coefficient

Poor diversification

The 3 months correlation between Titan and Corsair is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Titan Machinery and Corsair Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corsair 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 Corsair Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corsair Gaming has no effect on the direction of Titan Machinery i.e., Titan Machinery and Corsair Gaming go up and down completely randomly.

Pair Corralation between Titan Machinery and Corsair Gaming

Assuming the 90 days horizon Titan Machinery is expected to under-perform the Corsair Gaming. But the stock apears to be less risky and, when comparing its historical volatility, Titan Machinery is 1.52 times less risky than Corsair Gaming. The stock trades about -0.09 of its potential returns per unit of risk. The Corsair Gaming is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  707.00  in Corsair Gaming on October 10, 2024 and sell it today you would lose (29.00) from holding Corsair Gaming or give up 4.1% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Titan Machinery  vs.  Corsair Gaming

 Performance 
       Timeline  
Titan Machinery 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Titan Machinery are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Titan Machinery may actually be approaching a critical reversion point that can send shares even higher in February 2025.
Corsair Gaming 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Corsair Gaming are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Corsair Gaming reported solid returns over the last few months and may actually be approaching a breakup point.

Titan Machinery and Corsair Gaming Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Titan Machinery and Corsair Gaming

The main advantage of trading using opposite Titan Machinery and Corsair Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Titan Machinery position performs unexpectedly, Corsair Gaming 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 Corsair Gaming will offset losses from the drop in Corsair Gaming's long position.
The idea behind Titan Machinery and Corsair Gaming 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.
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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 Stocks Directory module to find actively traded stocks across global markets.

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