Correlation Between TITAN MACHINERY and DEXUS

Can any of the company-specific risk be diversified away by investing in both TITAN MACHINERY and DEXUS 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 MACHINERY and DEXUS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TITAN MACHINERY and DEXUS, you can compare the effects of market volatilities on TITAN MACHINERY and DEXUS 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 MACHINERY with a short position of DEXUS. Check out your portfolio center. Please also check ongoing floating volatility patterns of TITAN MACHINERY and DEXUS.

Diversification Opportunities for TITAN MACHINERY and DEXUS

-0.19

Correlation Coefficient

TITAN MACHINERY  DEXUS

Good diversification

The 3 months correlation between TITAN and DEXUS is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding TITAN MACHINERY and DEXUS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DEXUS and TITAN MACHINERY 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 MACHINERY are associated (or correlated) with DEXUS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DEXUS has no effect on the direction of TITAN MACHINERY i.e., TITAN MACHINERY and DEXUS go up and down completely randomly.

Pair Corralation between TITAN MACHINERY and DEXUS

Assuming the 90 days trading horizon TITAN MACHINERY is expected to under-perform the DEXUS. In addition to that, TITAN MACHINERY is 1.72 times more volatile than DEXUS. It trades about -0.04 of its total potential returns per unit of risk. DEXUS is currently generating about 0.04 per unit of volatility. If you would invest  341.00  in DEXUS on October 8, 2024 and sell it today you would earn a total of  66.00  from holding DEXUS or generate 19.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

TITAN MACHINERY  vs.  DEXUS

TITAN MACHINERY

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in TITAN MACHINERY are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, TITAN MACHINERY may actually be approaching a critical reversion point that can send shares even higher in February 2025.

DEXUS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DEXUS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with TITAN MACHINERY and DEXUS

The main advantage of trading using opposite TITAN MACHINERY and DEXUS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TITAN MACHINERY position performs unexpectedly, DEXUS 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 DEXUS will offset losses from the drop in DEXUS's long position.

The idea behind TITAN MACHINERY and DEXUS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.