Correlation Between Till Capital and Martinrea International

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

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

Diversification Opportunities for Till Capital and Martinrea International

0.8

Correlation Coefficient

Till Capital  Martinrea International

Very poor diversification

The 3 months correlation between Till and Martinrea is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Till Capital and Martinrea International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Martinrea International and Till Capital 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 Till Capital are associated (or correlated) with Martinrea International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Martinrea International has no effect on the direction of Till Capital i.e., Till Capital and Martinrea International go up and down completely randomly.

Pair Corralation between Till Capital and Martinrea International

Assuming the 90 days horizon Till Capital is expected to generate 0.39 times more return on investment than Martinrea International. However, Till Capital is 2.55 times less risky than Martinrea International. It trades about -0.1 of its potential returns per unit of risk. Martinrea International is currently generating about -0.16 per unit of risk. If you would invest  106.00  in Till Capital on December 27, 2024 and sell it today you would lose (4.00) from holding Till Capital or give up 3.77% of portfolio value over 90 days.

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

Till Capital  vs.  Martinrea International

Till Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Till Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Till Capital is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Martinrea International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Martinrea International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Till Capital and Martinrea International

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

The idea behind Till Capital and Martinrea 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.