Correlation Between 532457CG1 and Titan Machinery

Can any of the company-specific risk be diversified away by investing in both 532457CG1 and Titan Machinery 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 532457CG1 and Titan Machinery into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LLY 4875 27 FEB 53 and Titan Machinery, you can compare the effects of market volatilities on 532457CG1 and Titan Machinery 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 532457CG1 with a short position of Titan Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of 532457CG1 and Titan Machinery.

Diversification Opportunities for 532457CG1 and Titan Machinery

-0.25

Correlation Coefficient

532457CG1  Titan Machinery

Very good diversification

The 3 months correlation between 532457CG1 and Titan is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding LLY 4875 27 FEB 53 and Titan Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titan Machinery and 532457CG1 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 LLY 4875 27 FEB 53 are associated (or correlated) with Titan Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Titan Machinery has no effect on the direction of 532457CG1 i.e., 532457CG1 and Titan Machinery go up and down completely randomly.

Pair Corralation between 532457CG1 and Titan Machinery

Assuming the 90 days trading horizon LLY 4875 27 FEB 53 is expected to generate 0.93 times more return on investment than Titan Machinery. However, LLY 4875 27 FEB 53 is 1.07 times less risky than Titan Machinery. It trades about 0.12 of its potential returns per unit of risk. Titan Machinery is currently generating about -0.21 per unit of risk. If you would invest  9,452  in LLY 4875 27 FEB 53 on September 28, 2024 and sell it today you would earn a total of  467.00  from holding LLY 4875 27 FEB 53 or generate 4.94% return on investment over 90 days.

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

LLY 4875 27 FEB 53  vs.  Titan Machinery

LLY 4875 27

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LLY 4875 27 FEB 53 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 532457CG1 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Titan Machinery

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Titan Machinery are ranked lower than 1 (%) 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.

Pair Trading with 532457CG1 and Titan Machinery

The main advantage of trading using opposite 532457CG1 and Titan Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 532457CG1 position performs unexpectedly, Titan Machinery 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 Titan Machinery will offset losses from the drop in Titan Machinery's long position.

The idea behind LLY 4875 27 FEB 53 and Titan Machinery 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.