Correlation Between Titan Machinery and Bolt Projects

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

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

Diversification Opportunities for Titan Machinery and Bolt Projects

-0.25

Correlation Coefficient

Titan Machinery  Bolt Projects

Very good diversification

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

Pair Corralation between Titan Machinery and Bolt Projects

Given the investment horizon of 90 days Titan Machinery is expected to generate 40.95 times less return on investment than Bolt Projects. But when comparing it to its historical volatility, Titan Machinery is 24.61 times less risky than Bolt Projects. It trades about 0.1 of its potential returns per unit of risk. Bolt Projects Holdings, is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  2.52  in Bolt Projects Holdings, on September 13, 2024 and sell it today you would earn a total of  0.48  from holding Bolt Projects Holdings, or generate 19.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	58.73%
Values	Daily Returns

Titan Machinery  vs.  Bolt Projects Holdings,

Titan Machinery

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Titan Machinery are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Titan Machinery displayed solid returns over the last few months and may actually be approaching a breakup point.

Bolt Projects Holdings,

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bolt Projects Holdings, are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting forward-looking signals, Bolt Projects showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Titan Machinery and Bolt Projects

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

The idea behind Titan Machinery and Bolt Projects Holdings, 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.