Correlation Between Shagrir Group and Titan Pharmaceuticals

Can any of the company-specific risk be diversified away by investing in both Shagrir Group and Titan Pharmaceuticals 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 Shagrir Group and Titan Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Shagrir Group Vehicle and Titan Pharmaceuticals, you can compare the effects of market volatilities on Shagrir Group and Titan Pharmaceuticals 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 Shagrir Group with a short position of Titan Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shagrir Group and Titan Pharmaceuticals.

Diversification Opportunities for Shagrir Group and Titan Pharmaceuticals

-0.06

Correlation Coefficient

Shagrir Group  Titan Pharmaceuticals

Good diversification

The 3 months correlation between Shagrir and Titan is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Shagrir Group Vehicle and Titan Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titan Pharmaceuticals and Shagrir Group 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 Shagrir Group Vehicle are associated (or correlated) with Titan Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Titan Pharmaceuticals has no effect on the direction of Shagrir Group i.e., Shagrir Group and Titan Pharmaceuticals go up and down completely randomly.

Pair Corralation between Shagrir Group and Titan Pharmaceuticals

Assuming the 90 days horizon Shagrir Group Vehicle is expected to under-perform the Titan Pharmaceuticals. But the pink sheet apears to be less risky and, when comparing its historical volatility, Shagrir Group Vehicle is 1.79 times less risky than Titan Pharmaceuticals. The pink sheet trades about -0.05 of its potential returns per unit of risk. The Titan Pharmaceuticals is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,104  in Titan Pharmaceuticals on January 29, 2024 and sell it today you would lose (395.00) from holding Titan Pharmaceuticals or give up 35.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Shagrir Group Vehicle  vs.  Titan Pharmaceuticals

Shagrir Group Vehicle

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shagrir Group Vehicle has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Titan Pharmaceuticals

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Titan Pharmaceuticals are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Titan Pharmaceuticals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Shagrir Group and Titan Pharmaceuticals

The main advantage of trading using opposite Shagrir Group and Titan Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shagrir Group position performs unexpectedly, Titan Pharmaceuticals 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 Pharmaceuticals will offset losses from the drop in Titan Pharmaceuticals' long position.

The idea behind Shagrir Group Vehicle and Titan Pharmaceuticals 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.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.