Correlation Between Ayes Celik and Cuhadaroglu Metal

Can any of the company-specific risk be diversified away by investing in both Ayes Celik and Cuhadaroglu Metal 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 Ayes Celik and Cuhadaroglu Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ayes Celik Hasir and Cuhadaroglu Metal Sanayi, you can compare the effects of market volatilities on Ayes Celik and Cuhadaroglu Metal 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 Ayes Celik with a short position of Cuhadaroglu Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ayes Celik and Cuhadaroglu Metal.

Diversification Opportunities for Ayes Celik and Cuhadaroglu Metal

-0.27

Correlation Coefficient

Ayes Celik  Cuhadaroglu Metal

Very good diversification

The 3 months correlation between Ayes and Cuhadaroglu is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Ayes Celik Hasir and Cuhadaroglu Metal Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cuhadaroglu Metal Sanayi and Ayes Celik 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 Ayes Celik Hasir are associated (or correlated) with Cuhadaroglu Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cuhadaroglu Metal Sanayi has no effect on the direction of Ayes Celik i.e., Ayes Celik and Cuhadaroglu Metal go up and down completely randomly.

Pair Corralation between Ayes Celik and Cuhadaroglu Metal

Assuming the 90 days trading horizon Ayes Celik Hasir is expected to under-perform the Cuhadaroglu Metal. In addition to that, Ayes Celik is 1.17 times more volatile than Cuhadaroglu Metal Sanayi. It trades about -0.04 of its total potential returns per unit of risk. Cuhadaroglu Metal Sanayi is currently generating about 0.08 per unit of volatility. If you would invest  2,124  in Cuhadaroglu Metal Sanayi on September 18, 2024 and sell it today you would earn a total of  234.00  from holding Cuhadaroglu Metal Sanayi or generate 11.02% return on investment over 90 days.

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

Ayes Celik Hasir  vs.  Cuhadaroglu Metal Sanayi

Ayes Celik Hasir

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ayes Celik Hasir has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Cuhadaroglu Metal Sanayi

Risk-Adjusted Performance

6 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cuhadaroglu Metal Sanayi are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Cuhadaroglu Metal may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Ayes Celik and Cuhadaroglu Metal

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

The idea behind Ayes Celik Hasir and Cuhadaroglu Metal Sanayi 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.

Check out your portfolio center.

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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.