Correlation Between Samfine Creation and Titan Machinery

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

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

Diversification Opportunities for Samfine Creation and Titan Machinery

0.58

Correlation Coefficient

Samfine Creation  Titan Machinery

Very weak diversification

The 3 months correlation between Samfine and Titan is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Samfine Creation Holdings and Titan Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titan Machinery and Samfine Creation 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 Samfine Creation Holdings 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 Samfine Creation i.e., Samfine Creation and Titan Machinery go up and down completely randomly.

Pair Corralation between Samfine Creation and Titan Machinery

Given the investment horizon of 90 days Samfine Creation Holdings is expected to generate 6.59 times more return on investment than Titan Machinery. However, Samfine Creation is 6.59 times more volatile than Titan Machinery. It trades about 0.01 of its potential returns per unit of risk. Titan Machinery is currently generating about 0.06 per unit of risk. If you would invest  530.00  in Samfine Creation Holdings on September 17, 2024 and sell it today you would lose (413.00) from holding Samfine Creation Holdings or give up 77.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	67.69%
Values	Daily Returns

Samfine Creation Holdings  vs.  Titan Machinery

Samfine Creation Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Samfine Creation Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly unsteady technical indicators, Samfine Creation reported solid returns over the last few months and may actually be approaching a breakup point.

Titan Machinery

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Titan Machinery are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Titan Machinery may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Samfine Creation and Titan Machinery

The main advantage of trading using opposite Samfine Creation and Titan Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samfine Creation 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 Samfine Creation Holdings 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 Global Correlations module to find global opportunities by holding instruments from different markets.