Correlation Between TITAN MACHINERY and Klpierre

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

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

Diversification Opportunities for TITAN MACHINERY and Klpierre

-0.14

Correlation Coefficient

TITAN MACHINERY  Klpierre

Good diversification

The 3 months correlation between TITAN and Klpierre is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding TITAN MACHINERY and Klpierre SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klpierre SA 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 Klpierre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klpierre SA has no effect on the direction of TITAN MACHINERY i.e., TITAN MACHINERY and Klpierre go up and down completely randomly.

Pair Corralation between TITAN MACHINERY and Klpierre

Assuming the 90 days trading horizon TITAN MACHINERY is expected to generate 3.78 times more return on investment than Klpierre. However, TITAN MACHINERY is 3.78 times more volatile than Klpierre SA. It trades about 0.1 of its potential returns per unit of risk. Klpierre SA is currently generating about 0.2 per unit of risk. If you would invest  1,260  in TITAN MACHINERY on December 21, 2024 and sell it today you would earn a total of  270.00  from holding TITAN MACHINERY or generate 21.43% 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.  Klpierre SA

TITAN MACHINERY

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in TITAN MACHINERY are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, TITAN MACHINERY exhibited solid returns over the last few months and may actually be approaching a breakup point.

Klpierre SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Klpierre SA are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Klpierre reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TITAN MACHINERY and Klpierre

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

The idea behind TITAN MACHINERY and Klpierre SA 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.