Correlation Between Cemtas Celik and ICBC Turkey

Can any of the company-specific risk be diversified away by investing in both Cemtas Celik and ICBC Turkey 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 ICBC Turkey 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 ICBC Turkey Bank, you can compare the effects of market volatilities on Cemtas Celik and ICBC Turkey 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 ICBC Turkey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cemtas Celik and ICBC Turkey.

Diversification Opportunities for Cemtas Celik and ICBC Turkey

0.72

Correlation Coefficient

Cemtas Celik  ICBC Turkey

Poor diversification

The 3 months correlation between Cemtas and ICBC is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Cemtas Celik Makina and ICBC Turkey Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICBC Turkey Bank 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 ICBC Turkey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICBC Turkey Bank has no effect on the direction of Cemtas Celik i.e., Cemtas Celik and ICBC Turkey go up and down completely randomly.

Pair Corralation between Cemtas Celik and ICBC Turkey

Assuming the 90 days trading horizon Cemtas Celik Makina is expected to under-perform the ICBC Turkey. In addition to that, Cemtas Celik is 1.04 times more volatile than ICBC Turkey Bank. It trades about -0.03 of its total potential returns per unit of risk. ICBC Turkey Bank is currently generating about -0.02 per unit of volatility. If you would invest  1,602  in ICBC Turkey Bank on September 24, 2024 and sell it today you would lose (187.00) from holding ICBC Turkey Bank or give up 11.67% of portfolio value over 90 days.

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

Cemtas Celik Makina  vs.  ICBC Turkey Bank

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.

ICBC Turkey Bank

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ICBC Turkey Bank are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, ICBC Turkey is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Cemtas Celik and ICBC Turkey

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

The idea behind Cemtas Celik Makina and ICBC Turkey Bank 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.