Correlation Between Titan Company and CCCB Bancorp

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

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

Diversification Opportunities for Titan Company and CCCB Bancorp

0.59

Correlation Coefficient

Titan Company  CCCB Bancorp

Very weak diversification

The 3 months correlation between Titan and CCCB is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Titan Company Limited and CCCB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCCB Bancorp and Titan Company 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 Company Limited are associated (or correlated) with CCCB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCCB Bancorp has no effect on the direction of Titan Company i.e., Titan Company and CCCB Bancorp go up and down completely randomly.

Pair Corralation between Titan Company and CCCB Bancorp

Assuming the 90 days trading horizon Titan Company Limited is expected to under-perform the CCCB Bancorp. In addition to that, Titan Company is 1.09 times more volatile than CCCB Bancorp. It trades about -0.08 of its total potential returns per unit of risk. CCCB Bancorp is currently generating about -0.04 per unit of volatility. If you would invest  575.00  in CCCB Bancorp on December 26, 2024 and sell it today you would lose (25.00) from holding CCCB Bancorp or give up 4.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Titan Company Limited  vs.  CCCB Bancorp

Titan Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Titan Company Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

CCCB Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days CCCB Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, CCCB Bancorp is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Titan Company and CCCB Bancorp

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

The idea behind Titan Company Limited and CCCB Bancorp 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.