Correlation Between Titan Company and Copper

Can any of the company-specific risk be diversified away by investing in both Titan Company and Copper 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 Copper 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 Copper, you can compare the effects of market volatilities on Titan Company and Copper 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 Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Titan Company and Copper.

Diversification Opportunities for Titan Company and Copper

-0.33

Correlation Coefficient

Titan Company  Copper

Very good diversification

The 3 months correlation between Titan and Copper is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Titan Company Limited and Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copper 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 Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copper has no effect on the direction of Titan Company i.e., Titan Company and Copper go up and down completely randomly.

Pair Corralation between Titan Company and Copper

Assuming the 90 days trading horizon Titan Company Limited is expected to under-perform the Copper. In addition to that, Titan Company is 1.22 times more volatile than Copper. It trades about -0.07 of its total potential returns per unit of risk. Copper is currently generating about 0.13 per unit of volatility. If you would invest  413.00  in Copper on December 2, 2024 and sell it today you would earn a total of  42.00  from holding Copper or generate 10.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Titan Company Limited  vs.  Copper

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 weak 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.

Copper

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Copper are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Copper may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Titan Company and Copper

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

The idea behind Titan Company Limited and Copper 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.