Correlation Between Miniso Group and Titan Machinery

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

By analyzing existing cross correlation between Miniso Group Holding and Titan Machinery, you can compare the effects of market volatilities on Miniso Group 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 Miniso Group with a short position of Titan Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Miniso Group and Titan Machinery.

Diversification Opportunities for Miniso Group and Titan Machinery

-0.07

Correlation Coefficient

Miniso Group  Titan Machinery

Good diversification

The 3 months correlation between Miniso and Titan is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Miniso Group Holding and Titan Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titan Machinery and Miniso Group 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 Miniso Group Holding 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 Miniso Group i.e., Miniso Group and Titan Machinery go up and down completely randomly.

Pair Corralation between Miniso Group and Titan Machinery

Given the investment horizon of 90 days Miniso Group Holding is expected to generate 1.96 times more return on investment than Titan Machinery. However, Miniso Group is 1.96 times more volatile than Titan Machinery. It trades about 0.13 of its potential returns per unit of risk. Titan Machinery is currently generating about -0.05 per unit of risk. If you would invest  1,933  in Miniso Group Holding on October 9, 2024 and sell it today you would earn a total of  474.00  from holding Miniso Group Holding or generate 24.52% return on investment over 90 days.

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

Miniso Group Holding  vs.  Titan Machinery

Miniso Group Holding

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Miniso Group Holding are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Miniso Group displayed solid returns over the last few months and may actually be approaching a breakup point.

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 very healthy basic indicators, Titan Machinery is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Miniso Group and Titan Machinery

The main advantage of trading using opposite Miniso Group and Titan Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Miniso Group 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.

The idea behind Miniso Group Holding and Titan Machinery 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.