Correlation Between TITAN MACHINERY and Socit Gnrale

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

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

Diversification Opportunities for TITAN MACHINERY and Socit Gnrale

0.58

Correlation Coefficient

TITAN MACHINERY  Socit Gnrale

Very weak diversification

The 3 months correlation between TITAN and Socit is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding TITAN MACHINERY and Socit Gnrale Socit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Socit Gnrale Socit 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 Socit Gnrale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Socit Gnrale Socit has no effect on the direction of TITAN MACHINERY i.e., TITAN MACHINERY and Socit Gnrale go up and down completely randomly.

Pair Corralation between TITAN MACHINERY and Socit Gnrale

Assuming the 90 days trading horizon TITAN MACHINERY is expected to generate 4.87 times less return on investment than Socit Gnrale. In addition to that, TITAN MACHINERY is 1.43 times more volatile than Socit Gnrale Socit. It trades about 0.02 of its total potential returns per unit of risk. Socit Gnrale Socit is currently generating about 0.16 per unit of volatility. If you would invest  2,200  in Socit Gnrale Socit on September 22, 2024 and sell it today you would earn a total of  469.00  from holding Socit Gnrale Socit or generate 21.32% return on investment over 90 days.

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

TITAN MACHINERY  vs.  Socit Gnrale Socit

TITAN MACHINERY

Risk-Adjusted Performance

1 of 100

Weak

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.

Socit Gnrale Socit

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Socit Gnrale Socit are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, Socit Gnrale unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TITAN MACHINERY and Socit Gnrale

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

The idea behind TITAN MACHINERY and Socit Gnrale Socit 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.