Correlation Between Titan International and Ideanomics

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

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

Diversification Opportunities for Titan International and Ideanomics

-0.22

Correlation Coefficient

Titan International  Ideanomics

Very good diversification

The 3 months correlation between Titan and Ideanomics is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Titan International and Ideanomics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ideanomics and Titan International 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 International are associated (or correlated) with Ideanomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ideanomics has no effect on the direction of Titan International i.e., Titan International and Ideanomics go up and down completely randomly.

Pair Corralation between Titan International and Ideanomics

Considering the 90-day investment horizon Titan International is expected to under-perform the Ideanomics. But the stock apears to be less risky and, when comparing its historical volatility, Titan International is 11.04 times less risky than Ideanomics. The stock trades about -0.06 of its potential returns per unit of risk. The Ideanomics is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  94.00  in Ideanomics on September 20, 2024 and sell it today you would lose (92.96) from holding Ideanomics or give up 98.89% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.47%
Values	Daily Returns

Titan International  vs.  Ideanomics

Titan International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Titan International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Titan International is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Ideanomics

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ideanomics are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, Ideanomics showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Titan International and Ideanomics

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

The idea behind Titan International and Ideanomics 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 Transaction History module to view history of all your transactions and understand their impact on performance.