Correlation Between Ellaktor and Titan Cement

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Can any of the company-specific risk be diversified away by investing in both Ellaktor and Titan Cement 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 Ellaktor and Titan Cement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ellaktor SA and Titan Cement International, you can compare the effects of market volatilities on Ellaktor and Titan Cement 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 Ellaktor with a short position of Titan Cement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ellaktor and Titan Cement.

Diversification Opportunities for Ellaktor and Titan Cement

-0.34
  Correlation Coefficient

Very good diversification

The 3 months correlation between Ellaktor and Titan is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Ellaktor SA and Titan Cement International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titan Cement Interna and Ellaktor 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 Ellaktor SA are associated (or correlated) with Titan Cement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Titan Cement Interna has no effect on the direction of Ellaktor i.e., Ellaktor and Titan Cement go up and down completely randomly.

Pair Corralation between Ellaktor and Titan Cement

Assuming the 90 days trading horizon Ellaktor SA is expected to under-perform the Titan Cement. But the stock apears to be less risky and, when comparing its historical volatility, Ellaktor SA is 1.03 times less risky than Titan Cement. The stock trades about -0.25 of its potential returns per unit of risk. The Titan Cement International is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest  3,235  in Titan Cement International on August 24, 2024 and sell it today you would earn a total of  475.00  from holding Titan Cement International or generate 14.68% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Ellaktor SA  vs.  Titan Cement International

 Performance 
       Timeline  
Ellaktor SA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Ellaktor SA 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 forward-looking signals remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.
Titan Cement Interna 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Titan Cement International are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Titan Cement unveiled solid returns over the last few months and may actually be approaching a breakup point.

Ellaktor and Titan Cement Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ellaktor and Titan Cement

The main advantage of trading using opposite Ellaktor and Titan Cement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ellaktor position performs unexpectedly, Titan Cement 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 Titan Cement will offset losses from the drop in Titan Cement's long position.
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The idea behind Ellaktor SA and Titan Cement International 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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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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