Correlation Between Titan Machinery and HUMANA

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Can any of the company-specific risk be diversified away by investing in both Titan Machinery and HUMANA 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 HUMANA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Titan Machinery and HUMANA INC, you can compare the effects of market volatilities on Titan Machinery and HUMANA 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 HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Titan Machinery and HUMANA.

Diversification Opportunities for Titan Machinery and HUMANA

-0.43
  Correlation Coefficient

Very good diversification

The 3 months correlation between Titan and HUMANA is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Titan Machinery and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC 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 HUMANA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUMANA INC has no effect on the direction of Titan Machinery i.e., Titan Machinery and HUMANA go up and down completely randomly.

Pair Corralation between Titan Machinery and HUMANA

Given the investment horizon of 90 days Titan Machinery is expected to generate 2.06 times more return on investment than HUMANA. However, Titan Machinery is 2.06 times more volatile than HUMANA INC. It trades about 0.03 of its potential returns per unit of risk. HUMANA INC is currently generating about -0.2 per unit of risk. If you would invest  1,463  in Titan Machinery on September 15, 2024 and sell it today you would earn a total of  15.00  from holding Titan Machinery or generate 1.03% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy95.45%
ValuesDaily Returns

Titan Machinery  vs.  HUMANA INC

 Performance 
       Timeline  
Titan Machinery 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Titan Machinery are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Titan Machinery may actually be approaching a critical reversion point that can send shares even higher in January 2025.
HUMANA INC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days HUMANA INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for HUMANA INC investors.

Titan Machinery and HUMANA Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Titan Machinery and HUMANA

The main advantage of trading using opposite Titan Machinery and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Titan Machinery position performs unexpectedly, HUMANA 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 HUMANA will offset losses from the drop in HUMANA's long position.
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The idea behind Titan Machinery and HUMANA INC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

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