Correlation Between Titan Machinery and Oatly Group
Can any of the company-specific risk be diversified away by investing in both Titan Machinery and Oatly Group 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 Oatly Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Titan Machinery and Oatly Group AB, you can compare the effects of market volatilities on Titan Machinery and Oatly Group 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 Oatly Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Titan Machinery and Oatly Group.
Diversification Opportunities for Titan Machinery and Oatly Group
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Titan and Oatly is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Titan Machinery and Oatly Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oatly Group AB 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 Oatly Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oatly Group AB has no effect on the direction of Titan Machinery i.e., Titan Machinery and Oatly Group go up and down completely randomly.
Pair Corralation between Titan Machinery and Oatly Group
Given the investment horizon of 90 days Titan Machinery is expected to generate 0.32 times more return on investment than Oatly Group. However, Titan Machinery is 3.1 times less risky than Oatly Group. It trades about 0.18 of its potential returns per unit of risk. Oatly Group AB is currently generating about 0.01 per unit of risk. If you would invest 1,382 in Titan Machinery on November 30, 2024 and sell it today you would earn a total of 337.00 from holding Titan Machinery or generate 24.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Titan Machinery vs. Oatly Group AB
Performance |
| Timeline |
| Titan Machinery |
| Oatly Group AB |
Titan Machinery and Oatly Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Titan Machinery and Oatly Group
The main advantage of trading using opposite Titan Machinery and Oatly Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Titan Machinery position performs unexpectedly, Oatly Group 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 Oatly Group will offset losses from the drop in Oatly Group's long position.| Titan Machinery vs. DXP Enterprises | Titan Machinery vs. Watsco Inc | Titan Machinery vs. Distribution Solutions Group | Titan Machinery vs. SiteOne Landscape Supply |
| Oatly Group vs. Monster Beverage Corp | Oatly Group vs. Vita Coco | Oatly Group vs. PepsiCo | Oatly Group vs. The Coca Cola |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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