Correlation Between Cimsa Cimento and Kartonsan Karton

Can any of the company-specific risk be diversified away by investing in both Cimsa Cimento 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 Cimsa Cimento and Kartonsan Karton into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cimsa Cimento Sanayi and Kartonsan Karton Sanayi, you can compare the effects of market volatilities on Cimsa Cimento 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 Cimsa Cimento with a short position of Kartonsan Karton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cimsa Cimento and Kartonsan Karton.

Diversification Opportunities for Cimsa Cimento and Kartonsan Karton

0.73

Correlation Coefficient

Cimsa Cimento  Kartonsan Karton

Poor diversification

The 3 months correlation between Cimsa and Kartonsan is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Cimsa Cimento Sanayi 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 Cimsa Cimento 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 Cimsa Cimento Sanayi 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 Cimsa Cimento i.e., Cimsa Cimento and Kartonsan Karton go up and down completely randomly.

Pair Corralation between Cimsa Cimento and Kartonsan Karton

Assuming the 90 days trading horizon Cimsa Cimento Sanayi is expected to generate 1.21 times more return on investment than Kartonsan Karton. However, Cimsa Cimento is 1.21 times more volatile than Kartonsan Karton Sanayi. It trades about 0.11 of its potential returns per unit of risk. Kartonsan Karton Sanayi is currently generating about 0.04 per unit of risk. If you would invest  3,586  in Cimsa Cimento Sanayi on September 14, 2024 and sell it today you would earn a total of  676.00  from holding Cimsa Cimento Sanayi or generate 18.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Cimsa Cimento Sanayi  vs.  Kartonsan Karton Sanayi

Cimsa Cimento Sanayi

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cimsa Cimento Sanayi are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, Cimsa Cimento demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Kartonsan Karton Sanayi

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kartonsan Karton Sanayi are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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 Cimsa Cimento and Kartonsan Karton

The main advantage of trading using opposite Cimsa Cimento and Kartonsan Karton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cimsa Cimento 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 Cimsa Cimento Sanayi 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.

Check out your portfolio center.

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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.