Correlation Between Titan Cement and Optronics Technologies

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

By analyzing existing cross correlation between Titan Cement International and Optronics Technologies SA, you can compare the effects of market volatilities on Titan Cement and Optronics Technologies 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 Cement with a short position of Optronics Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Titan Cement and Optronics Technologies.

Diversification Opportunities for Titan Cement and Optronics Technologies

-0.53

Correlation Coefficient

Titan Cement  Optronics Technologies

Excellent diversification

The 3 months correlation between Titan and Optronics is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Titan Cement International and Optronics Technologies SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optronics Technologies and Titan Cement 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 Cement International are associated (or correlated) with Optronics Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optronics Technologies has no effect on the direction of Titan Cement i.e., Titan Cement and Optronics Technologies go up and down completely randomly.

Pair Corralation between Titan Cement and Optronics Technologies

Assuming the 90 days trading horizon Titan Cement International is expected to under-perform the Optronics Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Titan Cement International is 2.53 times less risky than Optronics Technologies. The stock trades about -0.09 of its potential returns per unit of risk. The Optronics Technologies SA is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest  138.00  in Optronics Technologies SA on April 24, 2025 and sell it today you would earn a total of  162.00  from holding Optronics Technologies SA or generate 117.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Titan Cement International  vs.  Optronics Technologies SA

Titan Cement Interna

Risk-Adjusted Performance

Very Weak

Over the last 90 days Titan Cement International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Optronics Technologies

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Optronics Technologies SA are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Optronics Technologies sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Titan Cement and Optronics Technologies

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

The idea behind Titan Cement International and Optronics Technologies SA 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.