Correlation Between Hawkins and Titan Machinery
Can any of the company-specific risk be diversified away by investing in both Hawkins 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 Hawkins and Titan Machinery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawkins and Titan Machinery, you can compare the effects of market volatilities on Hawkins 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 Hawkins with a short position of Titan Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawkins and Titan Machinery.
Diversification Opportunities for Hawkins and Titan Machinery
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hawkins and Titan is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Hawkins and Titan Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titan Machinery and Hawkins 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 Hawkins 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 Hawkins i.e., Hawkins and Titan Machinery go up and down completely randomly.
Pair Corralation between Hawkins and Titan Machinery
Given the investment horizon of 90 days Hawkins is expected to generate 0.85 times more return on investment than Titan Machinery. However, Hawkins is 1.17 times less risky than Titan Machinery. It trades about 0.14 of its potential returns per unit of risk. Titan Machinery is currently generating about -0.08 per unit of risk. If you would invest 6,991 in Hawkins on August 27, 2024 and sell it today you would earn a total of 6,012 from holding Hawkins or generate 86.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hawkins vs. Titan Machinery
Performance |
| Timeline |
| Hawkins |
| Titan Machinery |
Hawkins and Titan Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hawkins and Titan Machinery
The main advantage of trading using opposite Hawkins and Titan Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawkins 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.| Hawkins vs. H B Fuller | Hawkins vs. Minerals Technologies | Hawkins vs. Quaker Chemical | Hawkins vs. Oil Dri |
| Titan Machinery vs. Global Industrial Co | Titan Machinery vs. BlueLinx Holdings | Titan Machinery vs. WESCO International | Titan Machinery vs. MSC Industrial Direct |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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