Correlation Between Titan Company and Amg Timessquare

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

Diversification Opportunities for Titan Company and Amg Timessquare

-0.59

Correlation Coefficient

Titan Company  Amg Timessquare

Excellent diversification

The 3 months correlation between Titan and Amg is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Titan Company Limited and Amg Timessquare Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Timessquare Mid 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 Amg Timessquare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Timessquare Mid has no effect on the direction of Titan Company i.e., Titan Company and Amg Timessquare go up and down completely randomly.

Pair Corralation between Titan Company and Amg Timessquare

Assuming the 90 days trading horizon Titan Company Limited is expected to under-perform the Amg Timessquare. In addition to that, Titan Company is 1.54 times more volatile than Amg Timessquare Mid. It trades about -0.09 of its total potential returns per unit of risk. Amg Timessquare Mid is currently generating about 0.14 per unit of volatility. If you would invest  1,658  in Amg Timessquare Mid on September 12, 2024 and sell it today you would earn a total of  127.00  from holding Amg Timessquare Mid or generate 7.66% return on investment over 90 days.

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

Titan Company Limited  vs.  Amg Timessquare Mid

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.

Amg Timessquare Mid

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amg Timessquare Mid are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Amg Timessquare may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Titan Company and Amg Timessquare

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

The idea behind Titan Company Limited and Amg Timessquare Mid 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.