Correlation Between ChampionX and Titan Machinery
Can any of the company-specific risk be diversified away by investing in both ChampionX 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 ChampionX and Titan Machinery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ChampionX and Titan Machinery, you can compare the effects of market volatilities on ChampionX 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 ChampionX with a short position of Titan Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChampionX and Titan Machinery.
Diversification Opportunities for ChampionX and Titan Machinery
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between ChampionX and Titan is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding ChampionX and Titan Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titan Machinery and ChampionX 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 ChampionX 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 ChampionX i.e., ChampionX and Titan Machinery go up and down completely randomly.
Pair Corralation between ChampionX and Titan Machinery
Considering the 90-day investment horizon ChampionX is expected to generate 0.72 times more return on investment than Titan Machinery. However, ChampionX is 1.39 times less risky than Titan Machinery. It trades about 0.01 of its potential returns per unit of risk. Titan Machinery is currently generating about -0.05 per unit of risk. If you would invest 2,820 in ChampionX on September 19, 2024 and sell it today you would lose (66.00) from holding ChampionX or give up 2.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ChampionX vs. Titan Machinery
Performance |
| Timeline |
| ChampionX |
| Titan Machinery |
ChampionX and Titan Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChampionX and Titan Machinery
The main advantage of trading using opposite ChampionX and Titan Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChampionX 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.| ChampionX vs. Expro Group Holdings | ChampionX vs. Ranger Energy Services | ChampionX vs. Cactus Inc | ChampionX vs. MRC Global |
| Titan Machinery vs. DXP Enterprises | Titan Machinery vs. Watsco Inc | Titan Machinery vs. Distribution Solutions Group | Titan Machinery vs. SiteOne Landscape Supply |
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.
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