Correlation Between Manitowoc and Titan International

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

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

Diversification Opportunities for Manitowoc and Titan International

0.31

Correlation Coefficient

Manitowoc  Titan International

Weak diversification

The 3 months correlation between Manitowoc and Titan is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Manitowoc and Titan International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titan International and Manitowoc 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 Manitowoc are associated (or correlated) with Titan International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Titan International has no effect on the direction of Manitowoc i.e., Manitowoc and Titan International go up and down completely randomly.

Pair Corralation between Manitowoc and Titan International

Considering the 90-day investment horizon Manitowoc is expected to generate 2.94 times less return on investment than Titan International. But when comparing it to its historical volatility, Manitowoc is 1.75 times less risky than Titan International. It trades about 0.07 of its potential returns per unit of risk. Titan International is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  672.00  in Titan International on November 19, 2024 and sell it today you would earn a total of  214.00  from holding Titan International or generate 31.85% return on investment over 90 days.

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

Manitowoc  vs.  Titan International

Manitowoc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Manitowoc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Manitowoc may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Titan International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Titan International are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile basic indicators, Titan International demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Manitowoc and Titan International

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

The idea behind Manitowoc and Titan International 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.