Correlation Between Cemtas Celik and Iskenderun Demir

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

Diversification Opportunities for Cemtas Celik and Iskenderun Demir

0.86

Correlation Coefficient

Cemtas Celik  Iskenderun Demir

Very poor diversification

The 3 months correlation between Cemtas and Iskenderun is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Cemtas Celik Makina and Iskenderun Demir ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iskenderun Demir 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 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 Cemtas Celik i.e., Cemtas Celik and Iskenderun Demir go up and down completely randomly.

Pair Corralation between Cemtas Celik and Iskenderun Demir

Assuming the 90 days trading horizon Cemtas Celik Makina is expected to generate 1.25 times more return on investment than Iskenderun Demir. However, Cemtas Celik is 1.25 times more volatile than Iskenderun Demir ve. It trades about -0.01 of its potential returns per unit of risk. Iskenderun Demir ve is currently generating about -0.15 per unit of risk. If you would invest  916.00  in Cemtas Celik Makina on October 11, 2024 and sell it today you would lose (6.00) from holding Cemtas Celik Makina or give up 0.66% of portfolio value over 90 days.

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

Cemtas Celik Makina  vs.  Iskenderun Demir ve

Cemtas Celik Makina

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cemtas Celik Makina are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Cemtas Celik may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Iskenderun Demir

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Iskenderun Demir ve are ranked lower than 8 (%) 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 Cemtas Celik and Iskenderun Demir

The main advantage of trading using opposite Cemtas Celik and Iskenderun Demir positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cemtas Celik 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 Cemtas Celik Makina 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.