Correlation Between Banimmo SA and Titan Cement

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

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

Diversification Opportunities for Banimmo SA and Titan Cement

0.03

Correlation Coefficient

Banimmo SA  Titan Cement

Significant diversification

The 3 months correlation between Banimmo and Titan is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Banimmo SA and Titan Cement International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titan Cement Interna and Banimmo SA 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 Banimmo SA are associated (or correlated) with Titan Cement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Titan Cement Interna has no effect on the direction of Banimmo SA i.e., Banimmo SA and Titan Cement go up and down completely randomly.

Pair Corralation between Banimmo SA and Titan Cement

Assuming the 90 days trading horizon Banimmo SA is expected to generate 1.88 times less return on investment than Titan Cement. But when comparing it to its historical volatility, Banimmo SA is 1.87 times less risky than Titan Cement. It trades about 0.07 of its potential returns per unit of risk. Titan Cement International is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  3,975  in Titan Cement International on December 30, 2024 and sell it today you would earn a total of  300.00  from holding Titan Cement International or generate 7.55% return on investment over 90 days.

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

Banimmo SA  vs.  Titan Cement International

Banimmo SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Banimmo SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Banimmo SA is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Titan Cement Interna

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Titan Cement International are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Titan Cement may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Banimmo SA and Titan Cement

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

The idea behind Banimmo SA and Titan Cement International 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.