Correlation Between Titanium Transportation and Canfor

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

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

Diversification Opportunities for Titanium Transportation and Canfor

0.16

Correlation Coefficient

Titanium Transportation  Canfor

Average diversification

The 3 months correlation between Titanium and Canfor is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Titanium Transportation Group and Canfor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canfor and Titanium Transportation 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 Titanium Transportation Group are associated (or correlated) with Canfor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canfor has no effect on the direction of Titanium Transportation i.e., Titanium Transportation and Canfor go up and down completely randomly.

Pair Corralation between Titanium Transportation and Canfor

Assuming the 90 days trading horizon Titanium Transportation Group is expected to under-perform the Canfor. In addition to that, Titanium Transportation is 1.62 times more volatile than Canfor. It trades about -0.27 of its total potential returns per unit of risk. Canfor is currently generating about 0.05 per unit of volatility. If you would invest  1,474  in Canfor on December 23, 2024 and sell it today you would earn a total of  66.00  from holding Canfor or generate 4.48% return on investment over 90 days.

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

Titanium Transportation Group  vs.  Canfor

Titanium Transportation

Risk-Adjusted Performance

Very Weak

Over the last 90 days Titanium Transportation Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic 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.

Canfor

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Canfor are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Canfor is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Titanium Transportation and Canfor

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

The idea behind Titanium Transportation Group and Canfor 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.