Correlation Between Cemtas Celik and Cuhadaroglu Metal

Can any of the company-specific risk be diversified away by investing in both Cemtas 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 Cemtas 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 Cemtas Celik Makina and Cuhadaroglu Metal Sanayi, you can compare the effects of market volatilities on Cemtas 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 Cemtas Celik with a short position of Cuhadaroglu Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cemtas Celik and Cuhadaroglu Metal.

Diversification Opportunities for Cemtas Celik and Cuhadaroglu Metal

0.68

Correlation Coefficient

Cemtas Celik  Cuhadaroglu Metal

Poor diversification

The 3 months correlation between Cemtas and Cuhadaroglu is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Cemtas Celik Makina 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 Cemtas 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 Cemtas Celik Makina 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 Cemtas Celik i.e., Cemtas Celik and Cuhadaroglu Metal go up and down completely randomly.

Pair Corralation between Cemtas Celik and Cuhadaroglu Metal

Assuming the 90 days trading horizon Cemtas Celik is expected to generate 12.74 times less return on investment than Cuhadaroglu Metal. But when comparing it to its historical volatility, Cemtas Celik Makina is 3.03 times less risky than Cuhadaroglu Metal. It trades about 0.1 of its potential returns per unit of risk. Cuhadaroglu Metal Sanayi is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest  2,074  in Cuhadaroglu Metal Sanayi on September 23, 2024 and sell it today you would earn a total of  582.00  from holding Cuhadaroglu Metal Sanayi or generate 28.06% return on investment over 90 days.

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

Cemtas Celik Makina  vs.  Cuhadaroglu Metal Sanayi

Cemtas Celik Makina

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cemtas Celik Makina has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Cemtas Celik is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Cuhadaroglu Metal Sanayi

Risk-Adjusted Performance

9 of 100

OK

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

Pair Trading with Cemtas Celik and Cuhadaroglu Metal

The main advantage of trading using opposite Cemtas Celik and Cuhadaroglu Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cemtas 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 Cemtas Celik Makina 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.

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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.