Correlation Between Akcansa Cimento and Ihlas Holding

Can any of the company-specific risk be diversified away by investing in both Akcansa Cimento and Ihlas Holding 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 Akcansa Cimento and Ihlas Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Akcansa Cimento Sanayi and Ihlas Holding AS, you can compare the effects of market volatilities on Akcansa Cimento and Ihlas Holding 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 Akcansa Cimento with a short position of Ihlas Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akcansa Cimento and Ihlas Holding.

Diversification Opportunities for Akcansa Cimento and Ihlas Holding

0.62

Correlation Coefficient

Akcansa Cimento  Ihlas Holding

Poor diversification

The 3 months correlation between Akcansa and Ihlas is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Akcansa Cimento Sanayi and Ihlas Holding AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihlas Holding AS and Akcansa Cimento 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 Akcansa Cimento Sanayi are associated (or correlated) with Ihlas Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ihlas Holding AS has no effect on the direction of Akcansa Cimento i.e., Akcansa Cimento and Ihlas Holding go up and down completely randomly.

Pair Corralation between Akcansa Cimento and Ihlas Holding

Assuming the 90 days trading horizon Akcansa Cimento Sanayi is expected to generate 0.4 times more return on investment than Ihlas Holding. However, Akcansa Cimento Sanayi is 2.48 times less risky than Ihlas Holding. It trades about 0.35 of its potential returns per unit of risk. Ihlas Holding AS is currently generating about -0.1 per unit of risk. If you would invest  17,650  in Akcansa Cimento Sanayi on October 26, 2024 and sell it today you would earn a total of  2,550  from holding Akcansa Cimento Sanayi or generate 14.45% return on investment over 90 days.

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

Akcansa Cimento Sanayi  vs.  Ihlas Holding AS

Akcansa Cimento Sanayi

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Akcansa Cimento Sanayi are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Akcansa Cimento demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Ihlas Holding AS

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ihlas Holding AS are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Ihlas Holding demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Akcansa Cimento and Ihlas Holding

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

The idea behind Akcansa Cimento Sanayi and Ihlas Holding AS 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.