Correlation Between Titan Machinery and Core Main
Can any of the company-specific risk be diversified away by investing in both Titan Machinery and Core Main 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 Titan Machinery and Core Main into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Titan Machinery and Core Main, you can compare the effects of market volatilities on Titan Machinery and Core Main 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 Titan Machinery with a short position of Core Main. Check out your portfolio center. Please also check ongoing floating volatility patterns of Titan Machinery and Core Main.
Diversification Opportunities for Titan Machinery and Core Main
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Titan and Core is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Titan Machinery and Core Main in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Core Main and Titan Machinery 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 Titan Machinery are associated (or correlated) with Core Main. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Core Main has no effect on the direction of Titan Machinery i.e., Titan Machinery and Core Main go up and down completely randomly.
Pair Corralation between Titan Machinery and Core Main
Given the investment horizon of 90 days Titan Machinery is expected to under-perform the Core Main. In addition to that, Titan Machinery is 1.15 times more volatile than Core Main. It trades about -0.06 of its total potential returns per unit of risk. Core Main is currently generating about 0.06 per unit of volatility. If you would invest 3,640 in Core Main on September 2, 2024 and sell it today you would earn a total of 1,215 from holding Core Main or generate 33.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Titan Machinery vs. Core Main
Performance |
| Timeline |
| Titan Machinery |
| Core Main |
Titan Machinery and Core Main Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Titan Machinery and Core Main
The main advantage of trading using opposite Titan Machinery and Core Main positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Titan Machinery position performs unexpectedly, Core Main 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 Core Main will offset losses from the drop in Core Main's long position.| Titan Machinery vs. Oil States International | Titan Machinery vs. Oceaneering International | Titan Machinery vs. Geospace Technologies | Titan Machinery vs. Newpark Resources |
| Core Main vs. Oil States International | Core Main vs. Oceaneering International | Core Main vs. Geospace Technologies | Core Main vs. Newpark Resources |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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