Correlation Between Titan Company and 1Life Healthcare

Can any of the company-specific risk be diversified away by investing in both Titan Company and 1Life Healthcare 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 1Life Healthcare 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 1Life Healthcare, you can compare the effects of market volatilities on Titan Company and 1Life Healthcare 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 1Life Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Titan Company and 1Life Healthcare.

Diversification Opportunities for Titan Company and 1Life Healthcare

0.53

Correlation Coefficient

Titan Company  1Life Healthcare

Very weak diversification

The 3 months correlation between Titan and 1Life is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Titan Company Limited and 1Life Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1Life Healthcare 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 1Life Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1Life Healthcare has no effect on the direction of Titan Company i.e., Titan Company and 1Life Healthcare go up and down completely randomly.

Pair Corralation between Titan Company and 1Life Healthcare

If you would invest  319,845  in Titan Company Limited on September 13, 2024 and sell it today you would earn a total of  27,465  from holding Titan Company Limited or generate 8.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	5.0%
Values	Daily Returns

Titan Company Limited  vs.  1Life Healthcare

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 uncertain 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.

1Life Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 1Life Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, 1Life Healthcare is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Titan Company and 1Life Healthcare

The main advantage of trading using opposite Titan Company and 1Life Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Titan Company position performs unexpectedly, 1Life Healthcare 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 1Life Healthcare will offset losses from the drop in 1Life Healthcare's long position.

The idea behind Titan Company Limited and 1Life Healthcare 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.