Correlation Between Meiwu Technology and Titan Machinery

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

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

Diversification Opportunities for Meiwu Technology and Titan Machinery

0.42

Correlation Coefficient

Meiwu Technology  Titan Machinery

Very weak diversification

The 3 months correlation between Meiwu and Titan is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Meiwu Technology Co and Titan Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titan Machinery and Meiwu Technology 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 Meiwu Technology Co 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 Meiwu Technology i.e., Meiwu Technology and Titan Machinery go up and down completely randomly.

Pair Corralation between Meiwu Technology and Titan Machinery

Considering the 90-day investment horizon Meiwu Technology Co is expected to generate 3.38 times more return on investment than Titan Machinery. However, Meiwu Technology is 3.38 times more volatile than Titan Machinery. It trades about 0.0 of its potential returns per unit of risk. Titan Machinery is currently generating about -0.06 per unit of risk. If you would invest  697.00  in Meiwu Technology Co on September 12, 2024 and sell it today you would lose (568.00) from holding Meiwu Technology Co or give up 81.49% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Meiwu Technology Co  vs.  Titan Machinery

Meiwu Technology

Risk-Adjusted Performance

14 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Meiwu Technology Co are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Meiwu Technology showed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Meiwu Technology and Titan Machinery

The main advantage of trading using opposite Meiwu Technology and Titan Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiwu Technology 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 Meiwu Technology Co 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.

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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.