Correlation Between BB Biotech and Titan Machinery
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By analyzing existing cross correlation between BB Biotech AG and Titan Machinery, you can compare the effects of market volatilities on BB Biotech and Titan Machinery 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 BB Biotech with a short position of Titan Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of BB Biotech and Titan Machinery.
Diversification Opportunities for BB Biotech and Titan Machinery
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BBZA and Titan is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding BB Biotech AG and Titan Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titan Machinery and BB Biotech 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 BB Biotech AG are associated (or correlated) with Titan Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Titan Machinery has no effect on the direction of BB Biotech i.e., BB Biotech and Titan Machinery go up and down completely randomly.
Pair Corralation between BB Biotech and Titan Machinery
Assuming the 90 days trading horizon BB Biotech is expected to generate 3.87 times less return on investment than Titan Machinery. But when comparing it to its historical volatility, BB Biotech AG is 2.29 times less risky than Titan Machinery. It trades about 0.05 of its potential returns per unit of risk. Titan Machinery is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,300 in Titan Machinery on October 27, 2024 and sell it today you would earn a total of 170.00 from holding Titan Machinery or generate 13.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.36% |
Values | Daily Returns |
BB Biotech AG vs. Titan Machinery
Performance |
Timeline |
BB Biotech AG |
Titan Machinery |
BB Biotech and Titan Machinery Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BB Biotech and Titan Machinery
The main advantage of trading using opposite BB Biotech and Titan Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BB Biotech position performs unexpectedly, Titan Machinery 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 Titan Machinery will offset losses from the drop in Titan Machinery's long position.BB Biotech vs. JLF INVESTMENT | ||
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Check out your portfolio center.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 Transaction History module to view history of all your transactions and understand their impact on performance.
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