Correlation Between Titan Machinery and Banzai International

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

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

Diversification Opportunities for Titan Machinery and Banzai International

-0.21

Correlation Coefficient

Titan Machinery  Banzai International

Very good diversification

The 3 months correlation between Titan and Banzai is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Titan Machinery and Banzai International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banzai International and Titan Machinery 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 Machinery are associated (or correlated) with Banzai International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banzai International has no effect on the direction of Titan Machinery i.e., Titan Machinery and Banzai International go up and down completely randomly.

Pair Corralation between Titan Machinery and Banzai International

Given the investment horizon of 90 days Titan Machinery is expected to generate 105.96 times less return on investment than Banzai International. But when comparing it to its historical volatility, Titan Machinery is 8.77 times less risky than Banzai International. It trades about 0.01 of its potential returns per unit of risk. Banzai International is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  0.81  in Banzai International on September 28, 2024 and sell it today you would earn a total of  0.30  from holding Banzai International or generate 37.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	66.67%
Values	Daily Returns

Titan Machinery  vs.  Banzai International

Titan Machinery

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Titan Machinery has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Banzai International

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Banzai International are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating forward indicators, Banzai International showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Titan Machinery and Banzai International

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

The idea behind Titan Machinery and Banzai International 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.