Correlation Between Akbank TAS and Cimentas Izmir

Can any of the company-specific risk be diversified away by investing in both Akbank TAS and Cimentas Izmir 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 Akbank TAS and Cimentas Izmir into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Akbank TAS and Cimentas Izmir Cimento, you can compare the effects of market volatilities on Akbank TAS and Cimentas Izmir 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 Akbank TAS with a short position of Cimentas Izmir. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akbank TAS and Cimentas Izmir.

Diversification Opportunities for Akbank TAS and Cimentas Izmir

0.78

Correlation Coefficient

Akbank TAS  Cimentas Izmir

Poor diversification

The 3 months correlation between Akbank and Cimentas is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Akbank TAS and Cimentas Izmir Cimento in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cimentas Izmir Cimento and Akbank TAS 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 Akbank TAS are associated (or correlated) with Cimentas Izmir. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cimentas Izmir Cimento has no effect on the direction of Akbank TAS i.e., Akbank TAS and Cimentas Izmir go up and down completely randomly.

Pair Corralation between Akbank TAS and Cimentas Izmir

Assuming the 90 days trading horizon Akbank TAS is expected to generate 0.83 times more return on investment than Cimentas Izmir. However, Akbank TAS is 1.21 times less risky than Cimentas Izmir. It trades about -0.04 of its potential returns per unit of risk. Cimentas Izmir Cimento is currently generating about -0.15 per unit of risk. If you would invest  6,635  in Akbank TAS on October 10, 2024 and sell it today you would lose (160.00) from holding Akbank TAS or give up 2.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Akbank TAS  vs.  Cimentas Izmir Cimento

Akbank TAS

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Akbank TAS are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Akbank TAS demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Cimentas Izmir Cimento

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cimentas Izmir Cimento are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Cimentas Izmir demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Akbank TAS and Cimentas Izmir

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

The idea behind Akbank TAS and Cimentas Izmir Cimento 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.