Correlation Between Titan Mining and Prosper Gold

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

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

Diversification Opportunities for Titan Mining and Prosper Gold

0.47

Correlation Coefficient

Titan Mining  Prosper Gold

Very weak diversification

The 3 months correlation between Titan and Prosper is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Titan Mining Corp and Prosper Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosper Gold Corp and Titan 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 Titan Mining Corp are associated (or correlated) with Prosper Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosper Gold Corp has no effect on the direction of Titan Mining i.e., Titan Mining and Prosper Gold go up and down completely randomly.

Pair Corralation between Titan Mining and Prosper Gold

Assuming the 90 days horizon Titan Mining Corp is expected to generate 1.09 times more return on investment than Prosper Gold. However, Titan Mining is 1.09 times more volatile than Prosper Gold Corp. It trades about 0.13 of its potential returns per unit of risk. Prosper Gold Corp is currently generating about -0.06 per unit of risk. If you would invest  27.00  in Titan Mining Corp on January 20, 2024 and sell it today you would earn a total of  5.00  from holding Titan Mining Corp or generate 18.52% return on investment over 90 days.

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

Titan Mining Corp  vs.  Prosper Gold Corp

Titan Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Prosper Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prosper Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in May 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Titan Mining and Prosper Gold

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

The idea behind Titan Mining Corp and Prosper Gold 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.