Correlation Between Titan International and Western Copper
Can any of the company-specific risk be diversified away by investing in both Titan International and Western Copper 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 International and Western Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Titan International and Western Copper and, you can compare the effects of market volatilities on Titan International and Western Copper 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 International with a short position of Western Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Titan International and Western Copper.
Diversification Opportunities for Titan International and Western Copper
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Titan and Western is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Titan International and Western Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Copper and Titan International 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 International are associated (or correlated) with Western Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Copper has no effect on the direction of Titan International i.e., Titan International and Western Copper go up and down completely randomly.
Pair Corralation between Titan International and Western Copper
Considering the 90-day investment horizon Titan International is expected to under-perform the Western Copper. In addition to that, Titan International is 1.05 times more volatile than Western Copper and. It trades about -0.03 of its total potential returns per unit of risk. Western Copper and is currently generating about 0.04 per unit of volatility. If you would invest 103.00 in Western Copper and on December 1, 2024 and sell it today you would earn a total of 2.00 from holding Western Copper and or generate 1.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Titan International vs. Western Copper and
Performance |
| Timeline |
| Titan International |
| Western Copper |
Titan International and Western Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Titan International and Western Copper
The main advantage of trading using opposite Titan International and Western Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Titan International position performs unexpectedly, Western Copper 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 Western Copper will offset losses from the drop in Western Copper's long position.| Titan International vs. Shyft Group | Titan International vs. Manitowoc | Titan International vs. Oshkosh | Titan International vs. Terex |
| Western Copper vs. Fury Gold Mines | Western Copper vs. EMX Royalty Corp | Western Copper vs. Nevada King Gold | Western Copper vs. Aftermath Silver |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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