Correlation Between Cemtas Celik and MEGA METAL

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

Diversification Opportunities for Cemtas Celik and MEGA METAL

0.55

Correlation Coefficient

Cemtas Celik  MEGA METAL

Very weak diversification

The 3 months correlation between Cemtas and MEGA is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Cemtas Celik Makina and MEGA METAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEGA METAL 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 MEGA METAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEGA METAL has no effect on the direction of Cemtas Celik i.e., Cemtas Celik and MEGA METAL go up and down completely randomly.

Pair Corralation between Cemtas Celik and MEGA METAL

Assuming the 90 days trading horizon Cemtas Celik Makina is expected to generate 0.76 times more return on investment than MEGA METAL. However, Cemtas Celik Makina is 1.32 times less risky than MEGA METAL. It trades about -0.08 of its potential returns per unit of risk. MEGA METAL is currently generating about -0.08 per unit of risk. If you would invest  1,138  in Cemtas Celik Makina on October 20, 2024 and sell it today you would lose (212.00) from holding Cemtas Celik Makina or give up 18.63% of portfolio value over 90 days.

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

Cemtas Celik Makina  vs.  MEGA METAL

Cemtas Celik Makina

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cemtas Celik Makina are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Cemtas Celik demonstrated solid returns over the last few months and may actually be approaching a breakup point.

MEGA METAL

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MEGA METAL are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, MEGA METAL 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 MEGA METAL

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

The idea behind Cemtas Celik Makina and MEGA METAL 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.