Correlation Between Titan Company and NeXGold Mining

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

Diversification Opportunities for Titan Company and NeXGold Mining

0.13

Correlation Coefficient

Titan Company  NeXGold Mining

Average diversification

The 3 months correlation between Titan and NeXGold is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Titan Company Limited and NeXGold Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NeXGold Mining Corp 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 NeXGold Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NeXGold Mining Corp has no effect on the direction of Titan Company i.e., Titan Company and NeXGold Mining go up and down completely randomly.

Pair Corralation between Titan Company and NeXGold Mining

Assuming the 90 days trading horizon Titan Company Limited is expected to under-perform the NeXGold Mining. But the stock apears to be less risky and, when comparing its historical volatility, Titan Company Limited is 2.23 times less risky than NeXGold Mining. The stock trades about -0.05 of its potential returns per unit of risk. The NeXGold Mining Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  67.00  in NeXGold Mining Corp on December 30, 2024 and sell it today you would lose (1.00) from holding NeXGold Mining Corp or give up 1.49% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Titan Company Limited  vs.  NeXGold Mining Corp

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 very healthy basic indicators, Titan Company is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

NeXGold Mining Corp

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Titan Company and NeXGold Mining

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

The idea behind Titan Company Limited and NeXGold Mining Corp 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.