Correlation Between TITAN MACHINERY and OAKTRSPECLENDNEW

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

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

Diversification Opportunities for TITAN MACHINERY and OAKTRSPECLENDNEW

0.63

Correlation Coefficient

TITAN MACHINERY  OAKTRSPECLENDNEW

Poor diversification

The 3 months correlation between TITAN and OAKTRSPECLENDNEW is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding TITAN MACHINERY and OAKTRSPECLENDNEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OAKTRSPECLENDNEW has no effect on the direction of TITAN MACHINERY i.e., TITAN MACHINERY and OAKTRSPECLENDNEW go up and down completely randomly.

Pair Corralation between TITAN MACHINERY and OAKTRSPECLENDNEW

Assuming the 90 days trading horizon TITAN MACHINERY is expected to under-perform the OAKTRSPECLENDNEW. In addition to that, TITAN MACHINERY is 2.68 times more volatile than OAKTRSPECLENDNEW. It trades about -0.05 of its total potential returns per unit of risk. OAKTRSPECLENDNEW is currently generating about 0.16 per unit of volatility. If you would invest  1,411  in OAKTRSPECLENDNEW on September 21, 2024 and sell it today you would earn a total of  46.00  from holding OAKTRSPECLENDNEW or generate 3.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.65%
Values	Daily Returns

TITAN MACHINERY  vs.  OAKTRSPECLENDNEW

TITAN MACHINERY

Risk-Adjusted Performance

1 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in TITAN MACHINERY are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, TITAN MACHINERY is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

OAKTRSPECLENDNEW

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in OAKTRSPECLENDNEW are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, OAKTRSPECLENDNEW is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with TITAN MACHINERY and OAKTRSPECLENDNEW

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

The idea behind TITAN MACHINERY and OAKTRSPECLENDNEW 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..