In general you ask, how many different instances of X can exist for a single instance of a Y, and vice versa? In your example, it does not completely make sense to talk about multiplicity in a class diagram context, for two reasons:
Your C does not maintain a reference to any associated A's or B's. Therefore, at best, it is a unidirectional relationship. This is OK when speaking of multiplicity, although not in your particular example (for which multiplicity does not make sense, see point 2). As far as multiplicity is concerned, ignoring point 2, A has exactly 1 C, B has exactly 1 C, and C has 0 A's and 0 B's.
Your relationship is in the form of a local variable. Therefore it is not really a class-level relationship. This relationship disappears as soon as the method of A (or B) returns. So really it does not necessarily make sense to establish an association diagram for these classes. A caller/callee graph, perhaps, but a general association, no.
Your example, where A uses C locally in some of its methods, is an example of a dependency, not an association. UML typically uses a dotted line for that (although some flavors may differ), and multiplicity does not come into play for this (sorry for the poor quality):

There are a couple of small changes to your example that would make multiplicity relevant. For example, leaving C as it is but changing A to:
class A {
C<Ball> c = new C<Ball>();
...
methodA(){
c.method1();
}
}
In this case, an A has exactly one C, and a C has zero A's (it is unidirectional). The UML would look like (again, sorry for the quality):

That is, if you make the change above, it becomes a zero-to-one relationship. It's unidirectional because the C is not aware of the A.
One more thing, when is it a many-to-many relationship for both (1) & (2)?
It's a many-to-many relationship when A stores links to multiple C's, and C stores links to multiple A's. For example, students to courses in a university. Every course contains multiple students, and every student takes multiple courses. E.g.:
class Student {
Collection<Course> courses;
}
class Course {
Collection<Student> students;
}