Correlation Between Traton SE and TITANIUM TRANSPORTGROUP

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

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

Diversification Opportunities for Traton SE and TITANIUM TRANSPORTGROUP

-0.87

Correlation Coefficient

Traton SE  TITANIUM TRANSPORTGROUP

Pay attention - limited upside

The 3 months correlation between Traton and TITANIUM is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Traton SE and TITANIUM TRANSPORTGROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TITANIUM TRANSPORTGROUP and Traton SE 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 Traton SE are associated (or correlated) with TITANIUM TRANSPORTGROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TITANIUM TRANSPORTGROUP has no effect on the direction of Traton SE i.e., Traton SE and TITANIUM TRANSPORTGROUP go up and down completely randomly.

Pair Corralation between Traton SE and TITANIUM TRANSPORTGROUP

Assuming the 90 days trading horizon Traton SE is expected to generate 0.93 times more return on investment than TITANIUM TRANSPORTGROUP. However, Traton SE is 1.08 times less risky than TITANIUM TRANSPORTGROUP. It trades about 0.09 of its potential returns per unit of risk. TITANIUM TRANSPORTGROUP is currently generating about -0.25 per unit of risk. If you would invest  2,800  in Traton SE on December 27, 2024 and sell it today you would earn a total of  390.00  from holding Traton SE or generate 13.93% return on investment over 90 days.

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

Traton SE  vs.  TITANIUM TRANSPORTGROUP

Traton SE

Risk-Adjusted Performance

OK

Over the last 90 days Traton SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak basic indicators, Traton SE reported solid returns over the last few months and may actually be approaching a breakup point.

TITANIUM TRANSPORTGROUP

Risk-Adjusted Performance

Very Weak

Over the last 90 days TITANIUM TRANSPORTGROUP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Traton SE and TITANIUM TRANSPORTGROUP

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

The idea behind Traton SE and TITANIUM TRANSPORTGROUP 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.