Correlation Between Cemtas Celik and Kartonsan Karton

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

Diversification Opportunities for Cemtas Celik and Kartonsan Karton

0.78

Correlation Coefficient

Cemtas Celik  Kartonsan Karton

Poor diversification

The 3 months correlation between Cemtas and Kartonsan is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Cemtas Celik Makina and Kartonsan Karton Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kartonsan Karton 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 Kartonsan Karton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kartonsan Karton Sanayi has no effect on the direction of Cemtas Celik i.e., Cemtas Celik and Kartonsan Karton go up and down completely randomly.

Pair Corralation between Cemtas Celik and Kartonsan Karton

Assuming the 90 days trading horizon Cemtas Celik Makina is expected to under-perform the Kartonsan Karton. But the stock apears to be less risky and, when comparing its historical volatility, Cemtas Celik Makina is 1.42 times less risky than Kartonsan Karton. The stock trades about -0.03 of its potential returns per unit of risk. The Kartonsan Karton Sanayi is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  8,875  in Kartonsan Karton Sanayi on September 23, 2024 and sell it today you would lose (135.00) from holding Kartonsan Karton Sanayi or give up 1.52% 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.  Kartonsan Karton 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.

Kartonsan Karton Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Cemtas Celik and Kartonsan Karton

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

The idea behind Cemtas Celik Makina and Kartonsan Karton 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.