Correlation Between Titan Machinery and China Changjiang

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

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

Diversification Opportunities for Titan Machinery and China Changjiang

0.0

Correlation Coefficient

Titan Machinery  China Changjiang

Pay attention - limited upside

The 3 months correlation between Titan and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Titan Machinery and China Changjiang Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Changjiang Mining 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 China Changjiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Changjiang Mining has no effect on the direction of Titan Machinery i.e., Titan Machinery and China Changjiang go up and down completely randomly.

Pair Corralation between Titan Machinery and China Changjiang

If you would invest  1,331  in Titan Machinery on September 13, 2024 and sell it today you would earn a total of  223.00  from holding Titan Machinery or generate 16.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Titan Machinery  vs.  China Changjiang Mining

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.

China Changjiang Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days China Changjiang Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward-looking indicators, China Changjiang is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Titan Machinery and China Changjiang

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

The idea behind Titan Machinery and China Changjiang Mining 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.