Correlation Between Bursa Cimento and Iskenderun Demir

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

By analyzing existing cross correlation between Bursa Cimento Fabrikasi and Iskenderun Demir ve, you can compare the effects of market volatilities on Bursa Cimento and Iskenderun Demir 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 Bursa Cimento with a short position of Iskenderun Demir. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bursa Cimento and Iskenderun Demir.

Diversification Opportunities for Bursa Cimento and Iskenderun Demir

0.93

Correlation Coefficient

Bursa Cimento  Iskenderun Demir

Almost no diversification

The 3 months correlation between Bursa and Iskenderun is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Bursa Cimento Fabrikasi and Iskenderun Demir ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iskenderun Demir and Bursa 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 Bursa Cimento Fabrikasi are associated (or correlated) with Iskenderun Demir. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iskenderun Demir has no effect on the direction of Bursa Cimento i.e., Bursa Cimento and Iskenderun Demir go up and down completely randomly.

Pair Corralation between Bursa Cimento and Iskenderun Demir

Assuming the 90 days trading horizon Bursa Cimento Fabrikasi is expected to generate 1.08 times more return on investment than Iskenderun Demir. However, Bursa Cimento is 1.08 times more volatile than Iskenderun Demir ve. It trades about 0.05 of its potential returns per unit of risk. Iskenderun Demir ve is currently generating about 0.03 per unit of risk. If you would invest  542.00  in Bursa Cimento Fabrikasi on October 12, 2024 and sell it today you would earn a total of  343.00  from holding Bursa Cimento Fabrikasi or generate 63.28% return on investment over 90 days.

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

Bursa Cimento Fabrikasi  vs.  Iskenderun Demir ve

Bursa Cimento Fabrikasi

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bursa Cimento Fabrikasi are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Bursa Cimento demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Iskenderun Demir

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Iskenderun Demir ve are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Iskenderun Demir demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bursa Cimento and Iskenderun Demir

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

The idea behind Bursa Cimento Fabrikasi and Iskenderun Demir ve 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.