Correlation Between Postal Savings and TITAN MACHINERY
Can any of the company-specific risk be diversified away by investing in both Postal Savings and TITAN MACHINERY 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 Postal Savings and TITAN MACHINERY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Postal Savings Bank and TITAN MACHINERY, you can compare the effects of market volatilities on Postal Savings and TITAN MACHINERY 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 Postal Savings with a short position of TITAN MACHINERY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Postal Savings and TITAN MACHINERY.
Diversification Opportunities for Postal Savings and TITAN MACHINERY
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Postal and TITAN is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Postal Savings Bank and TITAN MACHINERY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TITAN MACHINERY and Postal Savings 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 Postal Savings Bank are associated (or correlated) with TITAN MACHINERY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TITAN MACHINERY has no effect on the direction of Postal Savings i.e., Postal Savings and TITAN MACHINERY go up and down completely randomly.
Pair Corralation between Postal Savings and TITAN MACHINERY
Assuming the 90 days horizon Postal Savings is expected to generate 3.34 times less return on investment than TITAN MACHINERY. But when comparing it to its historical volatility, Postal Savings Bank is 1.16 times less risky than TITAN MACHINERY. It trades about 0.05 of its potential returns per unit of risk. TITAN MACHINERY is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,260 in TITAN MACHINERY on August 28, 2024 and sell it today you would earn a total of 210.00 from holding TITAN MACHINERY or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Postal Savings Bank vs. TITAN MACHINERY
Performance |
| Timeline |
| Postal Savings Bank |
| TITAN MACHINERY |
Postal Savings and TITAN MACHINERY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Postal Savings and TITAN MACHINERY
The main advantage of trading using opposite Postal Savings and TITAN MACHINERY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postal Savings position performs unexpectedly, TITAN MACHINERY 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 TITAN MACHINERY will offset losses from the drop in TITAN MACHINERY's long position.| Postal Savings vs. Deutsche Bank Aktiengesellschaft | Postal Savings vs. Superior Plus Corp | Postal Savings vs. NMI Holdings | Postal Savings vs. Origin Agritech |
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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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