Correlation Between SSH Communications and Titanium Oyj

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

By analyzing existing cross correlation between SSH Communications Security and Titanium Oyj, you can compare the effects of market volatilities on SSH Communications and Titanium Oyj 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 SSH Communications with a short position of Titanium Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSH Communications and Titanium Oyj.

Diversification Opportunities for SSH Communications and Titanium Oyj

-0.17

Correlation Coefficient

SSH Communications  Titanium Oyj

Good diversification

The 3 months correlation between SSH and Titanium is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding SSH Communications Security and Titanium Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titanium Oyj and SSH Communications 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 SSH Communications Security are associated (or correlated) with Titanium Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Titanium Oyj has no effect on the direction of SSH Communications i.e., SSH Communications and Titanium Oyj go up and down completely randomly.

Pair Corralation between SSH Communications and Titanium Oyj

Assuming the 90 days trading horizon SSH Communications Security is expected to generate 1.11 times more return on investment than Titanium Oyj. However, SSH Communications is 1.11 times more volatile than Titanium Oyj. It trades about 0.08 of its potential returns per unit of risk. Titanium Oyj is currently generating about -0.12 per unit of risk. If you would invest  104.00  in SSH Communications Security on December 2, 2024 and sell it today you would earn a total of  13.00  from holding SSH Communications Security or generate 12.5% return on investment over 90 days.

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

SSH Communications Security  vs.  Titanium Oyj

SSH Communications

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SSH Communications Security are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent technical indicators, SSH Communications demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Titanium Oyj

Risk-Adjusted Performance

Very Weak

Over the last 90 days Titanium Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with SSH Communications and Titanium Oyj

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

The idea behind SSH Communications Security and Titanium Oyj 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.