Correlation Between Titan Company and AG Mortgage

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

Diversification Opportunities for Titan Company and AG Mortgage

-0.41

Correlation Coefficient

Titan Company  AG Mortgage

Very good diversification

The 3 months correlation between Titan and MITT-PB is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Titan Company Limited and AG Mortgage Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AG Mortgage Investment 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 AG Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AG Mortgage Investment has no effect on the direction of Titan Company i.e., Titan Company and AG Mortgage go up and down completely randomly.

Pair Corralation between Titan Company and AG Mortgage

Assuming the 90 days trading horizon Titan Company Limited is expected to under-perform the AG Mortgage. In addition to that, Titan Company is 1.35 times more volatile than AG Mortgage Investment. It trades about -0.12 of its total potential returns per unit of risk. AG Mortgage Investment is currently generating about 0.09 per unit of volatility. If you would invest  2,058  in AG Mortgage Investment on September 3, 2024 and sell it today you would earn a total of  118.00  from holding AG Mortgage Investment or generate 5.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.88%
Values	Daily Returns

Titan Company Limited  vs.  AG Mortgage Investment

Titan Limited

Risk-Adjusted Performance

0 of 100

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.

AG Mortgage Investment

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AG Mortgage Investment are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, AG Mortgage is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Titan Company and AG Mortgage

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

The idea behind Titan Company Limited and AG Mortgage Investment 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.