Correlation Between Astec Industries and Titan International
Can any of the company-specific risk be diversified away by investing in both Astec Industries and Titan International 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 Astec Industries and Titan International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astec Industries and Titan International, you can compare the effects of market volatilities on Astec Industries and Titan International 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 Astec Industries with a short position of Titan International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astec Industries and Titan International.
Diversification Opportunities for Astec Industries and Titan International
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Astec and Titan is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Astec Industries and Titan International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titan International and Astec Industries 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 Astec Industries are associated (or correlated) with Titan International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Titan International has no effect on the direction of Astec Industries i.e., Astec Industries and Titan International go up and down completely randomly.
Pair Corralation between Astec Industries and Titan International
Given the investment horizon of 90 days Astec Industries is expected to generate 2.58 times less return on investment than Titan International. But when comparing it to its historical volatility, Astec Industries is 1.97 times less risky than Titan International. It trades about 0.08 of its potential returns per unit of risk. Titan International is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 679.00 in Titan International on November 1, 2024 and sell it today you would earn a total of 200.00 from holding Titan International or generate 29.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astec Industries vs. Titan International
Performance |
| Timeline |
| Astec Industries |
| Titan International |
Astec Industries and Titan International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astec Industries and Titan International
The main advantage of trading using opposite Astec Industries and Titan International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astec Industries position performs unexpectedly, Titan International 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 International will offset losses from the drop in Titan International's long position.| Astec Industries vs. Hyster Yale Materials Handling | Astec Industries vs. Shyft Group | Astec Industries vs. Rev Group | Astec Industries vs. Lindsay |
| Titan International vs. Shyft Group | Titan International vs. Manitowoc | Titan International vs. Oshkosh | Titan International vs. Terex |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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