Correlation Between Titan Machinery and Revolve Group

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

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

Diversification Opportunities for Titan Machinery and Revolve Group

-0.37

Correlation Coefficient

Titan Machinery  Revolve Group

Very good diversification

The 3 months correlation between Titan and Revolve is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Titan Machinery and Revolve Group LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Revolve Group LLC 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 Revolve Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Revolve Group LLC has no effect on the direction of Titan Machinery i.e., Titan Machinery and Revolve Group go up and down completely randomly.

Pair Corralation between Titan Machinery and Revolve Group

Given the investment horizon of 90 days Titan Machinery is expected to generate 1.2 times more return on investment than Revolve Group. However, Titan Machinery is 1.2 times more volatile than Revolve Group LLC. It trades about -0.19 of its potential returns per unit of risk. Revolve Group LLC is currently generating about -0.38 per unit of risk. If you would invest  1,781  in Titan Machinery on December 5, 2024 and sell it today you would lose (252.00) from holding Titan Machinery or give up 14.15% of portfolio value over 90 days.

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

Titan Machinery  vs.  Revolve Group LLC

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 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.

Revolve Group LLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Revolve Group LLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's essential indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Titan Machinery and Revolve Group

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

The idea behind Titan Machinery and Revolve Group LLC 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.