Correlation Between Titan Machinery and ATRenew

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

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

Diversification Opportunities for Titan Machinery and ATRenew

0.06

Correlation Coefficient

Titan Machinery  ATRenew

Significant diversification

The 3 months correlation between Titan and ATRenew is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Titan Machinery and ATRenew Inc DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRenew Inc DRC 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 ATRenew. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRenew Inc DRC has no effect on the direction of Titan Machinery i.e., Titan Machinery and ATRenew go up and down completely randomly.

Pair Corralation between Titan Machinery and ATRenew

Given the investment horizon of 90 days Titan Machinery is expected to generate 0.87 times more return on investment than ATRenew. However, Titan Machinery is 1.15 times less risky than ATRenew. It trades about 0.13 of its potential returns per unit of risk. ATRenew Inc DRC is currently generating about 0.03 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  403.00  from holding Titan Machinery or generate 29.06% return on investment over 90 days.

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

Titan Machinery  vs.  ATRenew Inc DRC

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.

ATRenew Inc DRC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ATRenew Inc DRC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, ATRenew may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Titan Machinery and ATRenew

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

The idea behind Titan Machinery and ATRenew Inc DRC 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.