Correlation Between Titan Company and Grupa KTY
Can any of the company-specific risk be diversified away by investing in both Titan Company and Grupa KTY 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 Grupa KTY 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 Grupa KTY SA, you can compare the effects of market volatilities on Titan Company and Grupa KTY 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 Grupa KTY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Titan Company and Grupa KTY.
Diversification Opportunities for Titan Company and Grupa KTY
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Titan and Grupa is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Titan Company Limited and Grupa KTY SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupa KTY SA 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 Grupa KTY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupa KTY SA has no effect on the direction of Titan Company i.e., Titan Company and Grupa KTY go up and down completely randomly.
Pair Corralation between Titan Company and Grupa KTY
Assuming the 90 days trading horizon Titan Company is expected to generate 1.45 times less return on investment than Grupa KTY. But when comparing it to its historical volatility, Titan Company Limited is 1.35 times less risky than Grupa KTY. It trades about 0.14 of its potential returns per unit of risk. Grupa KTY SA is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 67,000 in Grupa KTY SA on September 6, 2024 and sell it today you would earn a total of 4,200 from holding Grupa KTY SA or generate 6.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Titan Company Limited vs. Grupa KTY SA
Performance |
| Timeline |
| Titan Limited |
| Grupa KTY SA |
Titan Company and Grupa KTY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Titan Company and Grupa KTY
The main advantage of trading using opposite Titan Company and Grupa KTY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Titan Company position performs unexpectedly, Grupa KTY 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 Grupa KTY will offset losses from the drop in Grupa KTY's long position.| Titan Company vs. Next Mediaworks Limited | Titan Company vs. ROUTE MOBILE LIMITED | Titan Company vs. Pritish Nandy Communications | Titan Company vs. Zee Entertainment Enterprises |
| Grupa KTY vs. Asseco Business Solutions | Grupa KTY vs. Detalion Games SA | Grupa KTY vs. Kogeneracja SA | Grupa KTY vs. Asseco South Eastern |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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