Correlation Between Titan Pharmaceuticals and Home Federal

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

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

Diversification Opportunities for Titan Pharmaceuticals and Home Federal

-0.33

Correlation Coefficient

Titan Pharmaceuticals  Home Federal

Very good diversification

The 3 months correlation between Titan and Home is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Titan Pharmaceuticals and Home Federal Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Federal Bancorp and Titan Pharmaceuticals 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 Pharmaceuticals are associated (or correlated) with Home Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Federal Bancorp has no effect on the direction of Titan Pharmaceuticals i.e., Titan Pharmaceuticals and Home Federal go up and down completely randomly.

Pair Corralation between Titan Pharmaceuticals and Home Federal

Given the investment horizon of 90 days Titan Pharmaceuticals is expected to generate 1.78 times more return on investment than Home Federal. However, Titan Pharmaceuticals is 1.78 times more volatile than Home Federal Bancorp. It trades about 0.01 of its potential returns per unit of risk. Home Federal Bancorp is currently generating about -0.01 per unit of risk. If you would invest  1,000.00  in Titan Pharmaceuticals on February 1, 2024 and sell it today you would lose (329.00) from holding Titan Pharmaceuticals or give up 32.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.34%
Values	Daily Returns

Titan Pharmaceuticals  vs.  Home Federal Bancorp

Titan Pharmaceuticals

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Titan Pharmaceuticals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Titan Pharmaceuticals reported solid returns over the last few months and may actually be approaching a breakup point.

Home Federal Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Home Federal Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's fundamental drivers remain quite persistent which may send shares a bit higher in June 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Titan Pharmaceuticals and Home Federal

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

The idea behind Titan Pharmaceuticals and Home Federal Bancorp 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.