Correlation Between Titan International and Globalfoundries
Can any of the company-specific risk be diversified away by investing in both Titan International and Globalfoundries 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 International and Globalfoundries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Titan International and Globalfoundries, you can compare the effects of market volatilities on Titan International and Globalfoundries 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 International with a short position of Globalfoundries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Titan International and Globalfoundries.
Diversification Opportunities for Titan International and Globalfoundries
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Titan and Globalfoundries is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Titan International and Globalfoundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globalfoundries and Titan International 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 International are associated (or correlated) with Globalfoundries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globalfoundries has no effect on the direction of Titan International i.e., Titan International and Globalfoundries go up and down completely randomly.
Pair Corralation between Titan International and Globalfoundries
Considering the 90-day investment horizon Titan International is expected to generate 2.08 times less return on investment than Globalfoundries. But when comparing it to its historical volatility, Titan International is 1.09 times less risky than Globalfoundries. It trades about 0.04 of its potential returns per unit of risk. Globalfoundries is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 4,072 in Globalfoundries on August 30, 2024 and sell it today you would earn a total of 213.00 from holding Globalfoundries or generate 5.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Titan International vs. Globalfoundries
Performance |
| Timeline |
| Titan International |
| Globalfoundries |
Titan International and Globalfoundries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Titan International and Globalfoundries
The main advantage of trading using opposite Titan International and Globalfoundries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Titan International position performs unexpectedly, Globalfoundries 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 Globalfoundries will offset losses from the drop in Globalfoundries' long position.| Titan International vs. MYR Group | Titan International vs. Granite Construction Incorporated | Titan International vs. Construction Partners | Titan International vs. Great Lakes Dredge |
| Globalfoundries vs. NXP Semiconductors NV | Globalfoundries vs. Analog Devices | Globalfoundries vs. ON Semiconductor | Globalfoundries vs. Lattice Semiconductor |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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