Correlation Between Globex Mining and Titan Mining

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

Diversification Opportunities for Globex Mining and Titan Mining

-0.42
  Correlation Coefficient

Very good diversification

The 3 months correlation between Globex and Titan is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Globex Mining Enterprises and Titan Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titan Mining Corp and Globex Mining 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 Globex Mining Enterprises are associated (or correlated) with Titan Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Titan Mining Corp has no effect on the direction of Globex Mining i.e., Globex Mining and Titan Mining go up and down completely randomly.

Pair Corralation between Globex Mining and Titan Mining

Assuming the 90 days trading horizon Globex Mining Enterprises is expected to under-perform the Titan Mining. But the stock apears to be less risky and, when comparing its historical volatility, Globex Mining Enterprises is 1.72 times less risky than Titan Mining. The stock trades about -0.02 of its potential returns per unit of risk. The Titan Mining Corp is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  57.00  in Titan Mining Corp on April 20, 2025 and sell it today you would earn a total of  55.00  from holding Titan Mining Corp or generate 96.49% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Globex Mining Enterprises  vs.  Titan Mining Corp

 Performance 
       Timeline  
Globex Mining Enterprises 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Globex Mining Enterprises has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Globex Mining is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.
Titan Mining Corp 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Titan Mining Corp are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Titan Mining displayed solid returns over the last few months and may actually be approaching a breakup point.

Globex Mining and Titan Mining Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Globex Mining and Titan Mining

The main advantage of trading using opposite Globex Mining and Titan Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globex Mining position performs unexpectedly, Titan Mining 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 Mining will offset losses from the drop in Titan Mining's long position.
The idea behind Globex Mining Enterprises and Titan Mining Corp 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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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 Global Correlations module to find global opportunities by holding instruments from different markets.

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