Correlation Between Titan International and Maanshan Iron
Can any of the company-specific risk be diversified away by investing in both Titan International and Maanshan Iron 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 Maanshan Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Titan International and Maanshan Iron Steel, you can compare the effects of market volatilities on Titan International and Maanshan Iron 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 Maanshan Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Titan International and Maanshan Iron.
Diversification Opportunities for Titan International and Maanshan Iron
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Titan and Maanshan is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Titan International and Maanshan Iron Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maanshan Iron Steel 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 Maanshan Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maanshan Iron Steel has no effect on the direction of Titan International i.e., Titan International and Maanshan Iron go up and down completely randomly.
Pair Corralation between Titan International and Maanshan Iron
Considering the 90-day investment horizon Titan International is expected to under-perform the Maanshan Iron. But the stock apears to be less risky and, when comparing its historical volatility, Titan International is 1.58 times less risky than Maanshan Iron. The stock trades about -0.04 of its potential returns per unit of risk. The Maanshan Iron Steel is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Maanshan Iron Steel on August 29, 2024 and sell it today you would lose (5.00) from holding Maanshan Iron Steel or give up 29.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Titan International vs. Maanshan Iron Steel
Performance |
| Timeline |
| Titan International |
| Maanshan Iron Steel |
Titan International and Maanshan Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Titan International and Maanshan Iron
The main advantage of trading using opposite Titan International and Maanshan Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Titan International position performs unexpectedly, Maanshan Iron 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 Maanshan Iron will offset losses from the drop in Maanshan Iron's long position.| Titan International vs. Shyft Group | Titan International vs. Manitowoc | Titan International vs. Terex | Titan International vs. Alamo Group |
| Maanshan Iron vs. ArcelorMittal SA ADR | Maanshan Iron vs. Gerdau SA ADR | Maanshan Iron vs. POSCO Holdings |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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