Correlation Between Titan Machinery and Richtech Robotics

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

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

Diversification Opportunities for Titan Machinery and Richtech Robotics

0.18

Correlation Coefficient

Titan Machinery  Richtech Robotics

Average diversification

The 3 months correlation between Titan and Richtech is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Titan Machinery and Richtech Robotics Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Richtech Robotics Class 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 Richtech Robotics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Richtech Robotics Class has no effect on the direction of Titan Machinery i.e., Titan Machinery and Richtech Robotics go up and down completely randomly.

Pair Corralation between Titan Machinery and Richtech Robotics

Given the investment horizon of 90 days Titan Machinery is expected to generate 17.78 times less return on investment than Richtech Robotics. But when comparing it to its historical volatility, Titan Machinery is 5.06 times less risky than Richtech Robotics. It trades about 0.04 of its potential returns per unit of risk. Richtech Robotics Class is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  115.00  in Richtech Robotics Class on December 19, 2024 and sell it today you would earn a total of  98.00  from holding Richtech Robotics Class or generate 85.22% 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.  Richtech Robotics Class

Titan Machinery

Risk-Adjusted Performance

Weak

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

Richtech Robotics Class

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Richtech Robotics Class are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, Richtech Robotics reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Titan Machinery and Richtech Robotics

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

The idea behind Titan Machinery and Richtech Robotics Class 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.