Correlation Between Titan Machinery and Lewis Clark

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

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

Diversification Opportunities for Titan Machinery and Lewis Clark

-0.4

Correlation Coefficient

Titan Machinery  Lewis Clark

Very good diversification

The 3 months correlation between Titan and Lewis is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Titan Machinery and Lewis Clark Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lewis Clark Bancorp and Titan Machinery 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 Titan Machinery are associated (or correlated) with Lewis Clark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lewis Clark Bancorp has no effect on the direction of Titan Machinery i.e., Titan Machinery and Lewis Clark go up and down completely randomly.

Pair Corralation between Titan Machinery and Lewis Clark

Given the investment horizon of 90 days Titan Machinery is expected to generate 2.69 times more return on investment than Lewis Clark. However, Titan Machinery is 2.69 times more volatile than Lewis Clark Bancorp. It trades about 0.13 of its potential returns per unit of risk. Lewis Clark Bancorp is currently generating about 0.09 per unit of risk. If you would invest  1,387  in Titan Machinery on December 27, 2024 and sell it today you would earn a total of  420.00  from holding Titan Machinery or generate 30.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Titan Machinery  vs.  Lewis Clark Bancorp

Titan Machinery

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Titan Machinery are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Titan Machinery displayed solid returns over the last few months and may actually be approaching a breakup point.

Lewis Clark Bancorp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lewis Clark Bancorp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating fundamental indicators, Lewis Clark may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Titan Machinery and Lewis Clark

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

The idea behind Titan Machinery and Lewis Clark Bancorp 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.