Correlation Between Titan Machinery and GameStop Corp
Can any of the company-specific risk be diversified away by investing in both Titan Machinery and GameStop Corp 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 GameStop Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Titan Machinery and GameStop Corp, you can compare the effects of market volatilities on Titan Machinery and GameStop Corp 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 GameStop Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Titan Machinery and GameStop Corp.
Diversification Opportunities for Titan Machinery and GameStop Corp
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Titan and GameStop is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Titan Machinery and GameStop Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GameStop Corp 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 GameStop Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GameStop Corp has no effect on the direction of Titan Machinery i.e., Titan Machinery and GameStop Corp go up and down completely randomly.
Pair Corralation between Titan Machinery and GameStop Corp
Assuming the 90 days horizon Titan Machinery is expected to generate 1.7 times less return on investment than GameStop Corp. In addition to that, Titan Machinery is 1.0 times more volatile than GameStop Corp. It trades about 0.22 of its total potential returns per unit of risk. GameStop Corp is currently generating about 0.38 per unit of volatility. If you would invest 2,148 in GameStop Corp on August 31, 2024 and sell it today you would earn a total of 758.00 from holding GameStop Corp or generate 35.29% 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. GameStop Corp
Performance |
| Timeline |
| Titan Machinery |
| GameStop Corp |
Titan Machinery and GameStop Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Titan Machinery and GameStop Corp
The main advantage of trading using opposite Titan Machinery and GameStop Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Titan Machinery position performs unexpectedly, GameStop Corp 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 GameStop Corp will offset losses from the drop in GameStop Corp's long position.| Titan Machinery vs. WATSCO INC B | Titan Machinery vs. Indutrade AB | Titan Machinery vs. Superior Plus Corp | Titan Machinery vs. NMI Holdings |
| GameStop Corp vs. MercadoLibre | GameStop Corp vs. AutoZone | GameStop Corp vs. Superior Plus Corp | GameStop Corp vs. NMI 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |