Correlation Between Titan International and Lion Electric

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

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

Diversification Opportunities for Titan International and Lion Electric

0.0

Correlation Coefficient

Titan International  Lion Electric

Pay attention - limited upside

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

Pair Corralation between Titan International and Lion Electric

If you would invest  692.00  in Titan International on December 27, 2024 and sell it today you would earn a total of  190.00  from holding Titan International or generate 27.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Titan International  vs.  Lion Electric Corp

Titan International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Titan International are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile basic indicators, Titan International demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Lion Electric Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lion Electric Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Lion Electric is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Titan International and Lion Electric

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

The idea behind Titan International and Lion Electric Corp 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.