Correlation Between Hydrofarm Holdings and Titan International
Can any of the company-specific risk be diversified away by investing in both Hydrofarm Holdings 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 Hydrofarm Holdings and Titan International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hydrofarm Holdings Group and Titan International, you can compare the effects of market volatilities on Hydrofarm Holdings 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 Hydrofarm Holdings with a short position of Titan International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hydrofarm Holdings and Titan International.
Diversification Opportunities for Hydrofarm Holdings and Titan International
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hydrofarm and Titan is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Hydrofarm Holdings Group and Titan International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titan International and Hydrofarm Holdings 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 Hydrofarm Holdings Group 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 Hydrofarm Holdings i.e., Hydrofarm Holdings and Titan International go up and down completely randomly.
Pair Corralation between Hydrofarm Holdings and Titan International
Given the investment horizon of 90 days Hydrofarm Holdings Group is expected to under-perform the Titan International. In addition to that, Hydrofarm Holdings is 1.26 times more volatile than Titan International. It trades about -0.02 of its total potential returns per unit of risk. Titan International is currently generating about -0.02 per unit of volatility. If you would invest 826.00 in Titan International on August 24, 2024 and sell it today you would lose (117.00) from holding Titan International or give up 14.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hydrofarm Holdings Group vs. Titan International
Performance |
| Timeline |
| Hydrofarm Holdings |
| Titan International |
Hydrofarm Holdings and Titan International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hydrofarm Holdings and Titan International
The main advantage of trading using opposite Hydrofarm Holdings and Titan International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hydrofarm Holdings 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.| Hydrofarm Holdings vs. Gencor Industries | Hydrofarm Holdings vs. CEA Industries | Hydrofarm Holdings vs. Arts Way Manufacturing Co | Hydrofarm Holdings vs. CubicFarm Systems Corp |
| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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