Correlation Between Titan Machinery and Match

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

By analyzing existing cross correlation between Titan Machinery and Match Group 5, you can compare the effects of market volatilities on Titan Machinery and Match 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 Match. Check out your portfolio center. Please also check ongoing floating volatility patterns of Titan Machinery and Match.

Diversification Opportunities for Titan Machinery and Match

-0.01

Correlation Coefficient

Titan Machinery  Match

Good diversification

The 3 months correlation between Titan and Match is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Titan Machinery and Match Group 5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Match Group 5 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 Match. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Match Group 5 has no effect on the direction of Titan Machinery i.e., Titan Machinery and Match go up and down completely randomly.

Pair Corralation between Titan Machinery and Match

Given the investment horizon of 90 days Titan Machinery is expected to generate 4.11 times more return on investment than Match. However, Titan Machinery is 4.11 times more volatile than Match Group 5. It trades about 0.0 of its potential returns per unit of risk. Match Group 5 is currently generating about -0.17 per unit of risk. If you would invest  1,352  in Titan Machinery on September 22, 2024 and sell it today you would lose (33.00) from holding Titan Machinery or give up 2.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	89.06%
Values	Daily Returns

Titan Machinery  vs.  Match Group 5

Titan Machinery

Risk-Adjusted Performance

0 of 100

Very 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.

Match Group 5

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Match Group 5 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for Match Group 5 investors.

Pair Trading with Titan Machinery and Match

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

The idea behind Titan Machinery and Match Group 5 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.