Correlation Between Titan International and Inflection Point

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

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

Diversification Opportunities for Titan International and Inflection Point

-0.9

Correlation Coefficient

Titan International  Inflection Point

Pay attention - limited upside

The 3 months correlation between Titan and Inflection is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Titan International and Inflection Point Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflection Point Acq and Titan International 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 International are associated (or correlated) with Inflection Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflection Point Acq has no effect on the direction of Titan International i.e., Titan International and Inflection Point go up and down completely randomly.

Pair Corralation between Titan International and Inflection Point

Considering the 90-day investment horizon Titan International is expected to under-perform the Inflection Point. In addition to that, Titan International is 10.99 times more volatile than Inflection Point Acquisition. It trades about -0.36 of its total potential returns per unit of risk. Inflection Point Acquisition is currently generating about 0.05 per unit of volatility. If you would invest  1,051  in Inflection Point Acquisition on February 3, 2024 and sell it today you would earn a total of  2.00  from holding Inflection Point Acquisition or generate 0.19% return on investment over 90 days.

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

Titan International  vs.  Inflection Point Acquisition

Titan International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Titan International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in June 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Inflection Point Acq

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Inflection Point Acquisition are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Inflection Point is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Titan International and Inflection Point

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

The idea behind Titan International and Inflection Point Acquisition 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.