Correlation Between SBC Medical and Titan Machinery
Can any of the company-specific risk be diversified away by investing in both SBC Medical 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 SBC Medical and Titan Machinery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBC Medical Group and Titan Machinery, you can compare the effects of market volatilities on SBC Medical 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 SBC Medical with a short position of Titan Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBC Medical and Titan Machinery.
Diversification Opportunities for SBC Medical and Titan Machinery
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between SBC and Titan is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding SBC Medical Group and Titan Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titan Machinery and SBC Medical 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 SBC Medical Group 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 SBC Medical i.e., SBC Medical and Titan Machinery go up and down completely randomly.
Pair Corralation between SBC Medical and Titan Machinery
Assuming the 90 days horizon SBC Medical Group is expected to generate 3.98 times more return on investment than Titan Machinery. However, SBC Medical is 3.98 times more volatile than Titan Machinery. It trades about 0.18 of its potential returns per unit of risk. Titan Machinery is currently generating about -0.06 per unit of risk. If you would invest 7.31 in SBC Medical Group on October 25, 2024 and sell it today you would earn a total of 18.69 from holding SBC Medical Group or generate 255.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 17.44% |
| Values | Daily Returns |
SBC Medical Group vs. Titan Machinery
Performance |
| Timeline |
| SBC Medical Group |
| Titan Machinery |
SBC Medical and Titan Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBC Medical and Titan Machinery
The main advantage of trading using opposite SBC Medical and Titan Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBC Medical 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.| SBC Medical vs. 1 800 FLOWERSCOM | SBC Medical vs. Space Communication | SBC Medical vs. Asbury Automotive Group | SBC Medical vs. Reservoir Media |
| 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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