Correlation Between Titan Machinery and Lotus Technology
Can any of the company-specific risk be diversified away by investing in both Titan Machinery and Lotus Technology 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 Lotus Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Titan Machinery and Lotus Technology American, you can compare the effects of market volatilities on Titan Machinery and Lotus Technology 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 Lotus Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Titan Machinery and Lotus Technology.
Diversification Opportunities for Titan Machinery and Lotus Technology
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Titan and Lotus is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Titan Machinery and Lotus Technology American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus Technology American 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 Lotus Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus Technology American has no effect on the direction of Titan Machinery i.e., Titan Machinery and Lotus Technology go up and down completely randomly.
Pair Corralation between Titan Machinery and Lotus Technology
Given the investment horizon of 90 days Titan Machinery is expected to generate 1.65 times more return on investment than Lotus Technology. However, Titan Machinery is 1.65 times more volatile than Lotus Technology American. It trades about 0.07 of its potential returns per unit of risk. Lotus Technology American is currently generating about 0.0 per unit of risk. If you would invest 1,449 in Titan Machinery on August 27, 2024 and sell it today you would earn a total of 65.00 from holding Titan Machinery or generate 4.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Titan Machinery vs. Lotus Technology American
Performance |
| Timeline |
| Titan Machinery |
| Lotus Technology American |
Titan Machinery and Lotus Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Titan Machinery and Lotus Technology
The main advantage of trading using opposite Titan Machinery and Lotus Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Titan Machinery position performs unexpectedly, Lotus Technology 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 Lotus Technology will offset losses from the drop in Lotus Technology's long position.| Titan Machinery vs. Global Industrial Co | Titan Machinery vs. BlueLinx Holdings | Titan Machinery vs. WESCO International | Titan Machinery vs. MSC Industrial Direct |
| Lotus Technology vs. Grocery Outlet Holding | Lotus Technology vs. Titan Machinery | Lotus Technology vs. Getty Realty | Lotus Technology vs. Upper Street Marketing |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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