Correlation Between Titan Machinery and INTERCONT HOTELS
Can any of the company-specific risk be diversified away by investing in both Titan Machinery and INTERCONT HOTELS 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 INTERCONT HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Titan Machinery and INTERCONT HOTELS, you can compare the effects of market volatilities on Titan Machinery and INTERCONT HOTELS 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 INTERCONT HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Titan Machinery and INTERCONT HOTELS.
Diversification Opportunities for Titan Machinery and INTERCONT HOTELS
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Titan and INTERCONT is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Titan Machinery and INTERCONT HOTELS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTERCONT HOTELS 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 INTERCONT HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTERCONT HOTELS has no effect on the direction of Titan Machinery i.e., Titan Machinery and INTERCONT HOTELS go up and down completely randomly.
Pair Corralation between Titan Machinery and INTERCONT HOTELS
Assuming the 90 days horizon Titan Machinery is expected to generate 2.07 times less return on investment than INTERCONT HOTELS. In addition to that, Titan Machinery is 1.32 times more volatile than INTERCONT HOTELS. It trades about 0.08 of its total potential returns per unit of risk. INTERCONT HOTELS is currently generating about 0.23 per unit of volatility. If you would invest 10,200 in INTERCONT HOTELS on August 28, 2024 and sell it today you would earn a total of 1,400 from holding INTERCONT HOTELS or generate 13.73% 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. INTERCONT HOTELS
Performance |
| Timeline |
| Titan Machinery |
| INTERCONT HOTELS |
Titan Machinery and INTERCONT HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Titan Machinery and INTERCONT HOTELS
The main advantage of trading using opposite Titan Machinery and INTERCONT HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Titan Machinery position performs unexpectedly, INTERCONT HOTELS 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 INTERCONT HOTELS will offset losses from the drop in INTERCONT HOTELS's long position.| Titan Machinery vs. Superior Plus Corp | Titan Machinery vs. NMI Holdings | Titan Machinery vs. Origin Agritech | Titan Machinery vs. SIVERS SEMICONDUCTORS AB |
| INTERCONT HOTELS vs. Packaging of | INTERCONT HOTELS vs. ERSTE GP BNK | INTERCONT HOTELS vs. W R Berkley | INTERCONT HOTELS vs. News Corporation |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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