Correlation Between Oshkosh and Titan International

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

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

Diversification Opportunities for Oshkosh and Titan International

0.7

Correlation Coefficient

Oshkosh  Titan International

Poor diversification

The 3 months correlation between Oshkosh and Titan is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Oshkosh and Titan International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titan International and Oshkosh 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 Oshkosh 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 Oshkosh i.e., Oshkosh and Titan International go up and down completely randomly.

Pair Corralation between Oshkosh and Titan International

Considering the 90-day investment horizon Oshkosh is expected to generate 8.61 times less return on investment than Titan International. But when comparing it to its historical volatility, Oshkosh is 1.18 times less risky than Titan International. It trades about 0.02 of its potential returns per unit of risk. Titan International is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  669.00  in Titan International on December 28, 2024 and sell it today you would earn a total of  227.00  from holding Titan International or generate 33.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Oshkosh  vs.  Titan International

Oshkosh

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Oshkosh are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Oshkosh is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Titan International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Titan International are ranked lower than 12 (%) 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 Oshkosh and Titan International

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

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.