Correlation Between Western Copper and Titan Machinery
Can any of the company-specific risk be diversified away by investing in both Western Copper and Titan Machinery 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 Western Copper and Titan Machinery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Copper and and Titan Machinery, you can compare the effects of market volatilities on Western Copper and Titan Machinery 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 Western Copper with a short position of Titan Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and Titan Machinery.
Diversification Opportunities for Western Copper and Titan Machinery
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Titan is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and Titan Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titan Machinery and Western Copper 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 Western Copper and are associated (or correlated) with Titan Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Titan Machinery has no effect on the direction of Western Copper i.e., Western Copper and Titan Machinery go up and down completely randomly.
Pair Corralation between Western Copper and Titan Machinery
Considering the 90-day investment horizon Western Copper and is expected to generate 1.02 times more return on investment than Titan Machinery. However, Western Copper is 1.02 times more volatile than Titan Machinery. It trades about -0.02 of its potential returns per unit of risk. Titan Machinery is currently generating about -0.05 per unit of risk. If you would invest 180.00 in Western Copper and on September 12, 2024 and sell it today you would lose (67.00) from holding Western Copper and or give up 37.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Copper and vs. Titan Machinery
Performance |
| Timeline |
| Western Copper |
| Titan Machinery |
Western Copper and Titan Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Copper and Titan Machinery
The main advantage of trading using opposite Western Copper and Titan Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper position performs unexpectedly, Titan Machinery 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 Titan Machinery will offset losses from the drop in Titan Machinery's long position.| Western Copper vs. Fury Gold Mines | Western Copper vs. EMX Royalty Corp | Western Copper vs. Nevada King Gold | Western Copper vs. Aftermath Silver |
| Titan Machinery vs. DXP Enterprises | Titan Machinery vs. Watsco Inc | Titan Machinery vs. Distribution Solutions Group | Titan Machinery vs. SiteOne Landscape Supply |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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