Correlation Between Titan International and Nikola Corp
Can any of the company-specific risk be diversified away by investing in both Titan International and Nikola Corp 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 Nikola Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Titan International and Nikola Corp, you can compare the effects of market volatilities on Titan International and Nikola Corp 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 Nikola Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Titan International and Nikola Corp.
Diversification Opportunities for Titan International and Nikola Corp
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Titan and Nikola is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Titan International and Nikola Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nikola Corp 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 Nikola Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nikola Corp has no effect on the direction of Titan International i.e., Titan International and Nikola Corp go up and down completely randomly.
Pair Corralation between Titan International and Nikola Corp
Considering the 90-day investment horizon Titan International is expected to generate 0.53 times more return on investment than Nikola Corp. However, Titan International is 1.89 times less risky than Nikola Corp. It trades about -0.03 of its potential returns per unit of risk. Nikola Corp is currently generating about -0.16 per unit of risk. If you would invest 1,400 in Titan International on November 3, 2024 and sell it today you would lose (517.00) from holding Titan International or give up 36.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Titan International vs. Nikola Corp
Performance |
| Timeline |
| Titan International |
| Nikola Corp |
Titan International and Nikola Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Titan International and Nikola Corp
The main advantage of trading using opposite Titan International and Nikola Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Titan International position performs unexpectedly, Nikola Corp 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 Nikola Corp will offset losses from the drop in Nikola Corp's long position.| Titan International vs. Shyft Group | Titan International vs. Manitowoc | Titan International vs. Oshkosh | Titan International vs. Terex |
| Nikola Corp vs. Xos Inc | Nikola Corp vs. Hydrofarm Holdings Group | Nikola Corp vs. Caterpillar | Nikola Corp vs. AGCO Corporation |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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