Correlation Between Titan International and Xos

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

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

Diversification Opportunities for Titan International and Xos

0.25

Correlation Coefficient

Titan International  Xos

Modest diversification

The 3 months correlation between Titan and Xos is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Titan International and Xos Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xos Inc 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 Xos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xos Inc has no effect on the direction of Titan International i.e., Titan International and Xos go up and down completely randomly.

Pair Corralation between Titan International and Xos

Considering the 90-day investment horizon Titan International is expected to generate 1.9 times less return on investment than Xos. But when comparing it to its historical volatility, Titan International is 4.0 times less risky than Xos. It trades about 0.13 of its potential returns per unit of risk. Xos Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  316.00  in Xos Inc on December 27, 2024 and sell it today you would earn a total of  49.00  from holding Xos Inc or generate 15.51% return on investment over 90 days.

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

Titan International  vs.  Xos Inc

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.

Xos Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Xos Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Xos unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Titan International and Xos

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

The idea behind Titan International and Xos Inc 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.