Correlation Between Titan Company and Greenfire Resources
Can any of the company-specific risk be diversified away by investing in both Titan Company and Greenfire Resources 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 Greenfire Resources 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 Greenfire Resources, you can compare the effects of market volatilities on Titan Company and Greenfire Resources 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 Greenfire Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Titan Company and Greenfire Resources.
Diversification Opportunities for Titan Company and Greenfire Resources
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Titan and Greenfire is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Titan Company Limited and Greenfire Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenfire Resources 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 Greenfire Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenfire Resources has no effect on the direction of Titan Company i.e., Titan Company and Greenfire Resources go up and down completely randomly.
Pair Corralation between Titan Company and Greenfire Resources
Assuming the 90 days trading horizon Titan Company Limited is expected to generate 0.58 times more return on investment than Greenfire Resources. However, Titan Company Limited is 1.73 times less risky than Greenfire Resources. It trades about 0.14 of its potential returns per unit of risk. Greenfire Resources is currently generating about -0.06 per unit of risk. If you would invest 322,200 in Titan Company Limited on September 5, 2024 and sell it today you would earn a total of 14,245 from holding Titan Company Limited or generate 4.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Titan Company Limited vs. Greenfire Resources
Performance |
| Timeline |
| Titan Limited |
| Greenfire Resources |
Titan Company and Greenfire Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Titan Company and Greenfire Resources
The main advantage of trading using opposite Titan Company and Greenfire Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Titan Company position performs unexpectedly, Greenfire Resources 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 Greenfire Resources will offset losses from the drop in Greenfire Resources' long position.| Titan Company vs. BF Investment Limited | Titan Company vs. Jayant Agro Organics | Titan Company vs. Jindal Poly Investment | Titan Company vs. Vidhi Specialty Food |
| Greenfire Resources vs. Western Midstream Partners | Greenfire Resources vs. Alliant Energy Corp | Greenfire Resources vs. Nextera Energy | Greenfire Resources vs. Sapiens International |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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