Correlation Between SENECA FOODS-A and Titan Machinery
Can any of the company-specific risk be diversified away by investing in both SENECA FOODS-A 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 SENECA FOODS-A and Titan Machinery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SENECA FOODS A and Titan Machinery, you can compare the effects of market volatilities on SENECA FOODS-A 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 SENECA FOODS-A with a short position of Titan Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of SENECA FOODS-A and Titan Machinery.
Diversification Opportunities for SENECA FOODS-A and Titan Machinery
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between SENECA and Titan is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and Titan Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titan Machinery and SENECA FOODS-A 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 SENECA FOODS A 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 SENECA FOODS-A i.e., SENECA FOODS-A and Titan Machinery go up and down completely randomly.
Pair Corralation between SENECA FOODS-A and Titan Machinery
Assuming the 90 days trading horizon SENECA FOODS-A is expected to generate 5.22 times less return on investment than Titan Machinery. But when comparing it to its historical volatility, SENECA FOODS A is 2.11 times less risky than Titan Machinery. It trades about 0.07 of its potential returns per unit of risk. Titan Machinery is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,310 in Titan Machinery on November 30, 2024 and sell it today you would earn a total of 310.00 from holding Titan Machinery or generate 23.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
SENECA FOODS A vs. Titan Machinery
Performance |
| Timeline |
| SENECA FOODS A |
| Titan Machinery |
SENECA FOODS-A and Titan Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SENECA FOODS-A and Titan Machinery
The main advantage of trading using opposite SENECA FOODS-A and Titan Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SENECA FOODS-A 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.| SENECA FOODS-A vs. Mobilezone Holding AG | SENECA FOODS-A vs. Insteel Industries | SENECA FOODS-A vs. Tianjin Capital Environmental | SENECA FOODS-A vs. INTERSHOP Communications Aktiengesellschaft |
| Titan Machinery vs. CHINA EDUCATION GROUP | Titan Machinery vs. CAREER EDUCATION | Titan Machinery vs. Live Nation Entertainment | Titan Machinery vs. PARKEN Sport Entertainment |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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