Correlation Between Titan Company and Metro AG
Can any of the company-specific risk be diversified away by investing in both Titan Company and Metro AG 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 Metro AG 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 Metro AG, you can compare the effects of market volatilities on Titan Company and Metro AG 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 Metro AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Titan Company and Metro AG.
Diversification Opportunities for Titan Company and Metro AG
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Titan and Metro is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Titan Company Limited and Metro AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro AG 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 Metro AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro AG has no effect on the direction of Titan Company i.e., Titan Company and Metro AG go up and down completely randomly.
Pair Corralation between Titan Company and Metro AG
Assuming the 90 days trading horizon Titan Company Limited is expected to under-perform the Metro AG. But the stock apears to be less risky and, when comparing its historical volatility, Titan Company Limited is 2.23 times less risky than Metro AG. The stock trades about -0.09 of its potential returns per unit of risk. The Metro AG is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 492.00 in Metro AG on September 12, 2024 and sell it today you would earn a total of 2.00 from holding Metro AG or generate 0.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.31% |
| Values | Daily Returns |
Titan Company Limited vs. Metro AG
Performance |
| Timeline |
| Titan Limited |
| Metro AG |
Titan Company and Metro AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Titan Company and Metro AG
The main advantage of trading using opposite Titan Company and Metro AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Titan Company position performs unexpectedly, Metro AG 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 Metro AG will offset losses from the drop in Metro AG's long position.| Titan Company vs. Ami Organics Limited | Titan Company vs. Kilitch Drugs Limited | Titan Company vs. Fertilizers and Chemicals | Titan Company vs. Beta Drugs |
| Metro AG vs. Superior Plus Corp | Metro AG vs. SIVERS SEMICONDUCTORS AB | Metro AG vs. NorAm Drilling AS | Metro AG vs. BANK HANDLOWY |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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