Correlation Between Titan Company and GGX Gold

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

Diversification Opportunities for Titan Company and GGX Gold

0.41

Correlation Coefficient

Titan Company  GGX Gold

Very weak diversification

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

Pair Corralation between Titan Company and GGX Gold

Assuming the 90 days trading horizon Titan Company Limited is expected to generate 0.22 times more return on investment than GGX Gold. However, Titan Company Limited is 4.58 times less risky than GGX Gold. It trades about -0.09 of its potential returns per unit of risk. GGX Gold Corp is currently generating about -0.04 per unit of risk. If you would invest  376,425  in Titan Company Limited on September 12, 2024 and sell it today you would lose (28,850) from holding Titan Company Limited or give up 7.66% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.83%
Values	Daily Returns

Titan Company Limited  vs.  GGX Gold Corp

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.

GGX Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GGX Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Titan Company and GGX Gold

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

The idea behind Titan Company Limited and GGX Gold 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 Transaction History module to view history of all your transactions and understand their impact on performance.