Correlation Between SYSTEMAIR and Titan Machinery
Can any of the company-specific risk be diversified away by investing in both SYSTEMAIR 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 SYSTEMAIR and Titan Machinery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SYSTEMAIR AB and Titan Machinery, you can compare the effects of market volatilities on SYSTEMAIR 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 SYSTEMAIR with a short position of Titan Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of SYSTEMAIR and Titan Machinery.
Diversification Opportunities for SYSTEMAIR and Titan Machinery
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between SYSTEMAIR and Titan is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding SYSTEMAIR AB and Titan Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titan Machinery and SYSTEMAIR 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 SYSTEMAIR AB 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 SYSTEMAIR i.e., SYSTEMAIR and Titan Machinery go up and down completely randomly.
Pair Corralation between SYSTEMAIR and Titan Machinery
Assuming the 90 days trading horizon SYSTEMAIR AB is expected to generate 0.57 times more return on investment than Titan Machinery. However, SYSTEMAIR AB is 1.76 times less risky than Titan Machinery. It trades about 0.11 of its potential returns per unit of risk. Titan Machinery is currently generating about 0.06 per unit of risk. If you would invest 692.00 in SYSTEMAIR AB on September 3, 2024 and sell it today you would earn a total of 90.00 from holding SYSTEMAIR AB or generate 13.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SYSTEMAIR AB vs. Titan Machinery
Performance |
| Timeline |
| SYSTEMAIR AB |
| Titan Machinery |
SYSTEMAIR and Titan Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SYSTEMAIR and Titan Machinery
The main advantage of trading using opposite SYSTEMAIR and Titan Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SYSTEMAIR 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.| SYSTEMAIR vs. SAFETY MEDICAL PROD | SYSTEMAIR vs. THORNEY TECHS LTD | SYSTEMAIR vs. RCM TECHNOLOGIES | SYSTEMAIR vs. Microbot Medical |
| Titan Machinery vs. WATSCO INC B | Titan Machinery vs. Indutrade AB | Titan Machinery vs. Superior Plus Corp | Titan Machinery 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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