Correlation Between Titan Machinery and Mid-Atlantic Home

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

By analyzing existing cross correlation between Titan Machinery and Mid Atlantic Home Health, you can compare the effects of market volatilities on Titan Machinery and Mid-Atlantic Home 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 Mid-Atlantic Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Titan Machinery and Mid-Atlantic Home.

Diversification Opportunities for Titan Machinery and Mid-Atlantic Home

0.0

Correlation Coefficient

Titan Machinery  Mid-Atlantic Home

Pay attention - limited upside

The 3 months correlation between Titan and Mid-Atlantic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Titan Machinery and Mid Atlantic Home Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Atlantic Home 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 Mid-Atlantic Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid Atlantic Home has no effect on the direction of Titan Machinery i.e., Titan Machinery and Mid-Atlantic Home go up and down completely randomly.

Pair Corralation between Titan Machinery and Mid-Atlantic Home

If you would invest  1,474  in Titan Machinery on December 17, 2024 and sell it today you would lose (41.00) from holding Titan Machinery or give up 2.78% of portfolio value over 90 days.

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

Titan Machinery  vs.  Mid Atlantic Home Health

Titan Machinery

Risk-Adjusted Performance

Very Weak

Over the last 90 days Titan Machinery has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Mid Atlantic Home

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mid Atlantic Home Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical indicators, Mid-Atlantic Home is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Titan Machinery and Mid-Atlantic Home

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

The idea behind Titan Machinery and Mid Atlantic Home Health 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.