Correlation Between Cimsa Cimento and Otokar Otomotiv

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

Diversification Opportunities for Cimsa Cimento and Otokar Otomotiv

0.58

Correlation Coefficient

Cimsa Cimento  Otokar Otomotiv

Very weak diversification

The 3 months correlation between Cimsa and Otokar is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Cimsa Cimento Sanayi and Otokar Otomotiv ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Otokar Otomotiv ve 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 Otokar Otomotiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Otokar Otomotiv ve has no effect on the direction of Cimsa Cimento i.e., Cimsa Cimento and Otokar Otomotiv go up and down completely randomly.

Pair Corralation between Cimsa Cimento and Otokar Otomotiv

Assuming the 90 days trading horizon Cimsa Cimento Sanayi is expected to generate 1.24 times more return on investment than Otokar Otomotiv. However, Cimsa Cimento is 1.24 times more volatile than Otokar Otomotiv ve. It trades about 0.14 of its potential returns per unit of risk. Otokar Otomotiv ve is currently generating about -0.11 per unit of risk. If you would invest  2,966  in Cimsa Cimento Sanayi on September 24, 2024 and sell it today you would earn a total of  1,510  from holding Cimsa Cimento Sanayi or generate 50.91% return on investment over 90 days.

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

Cimsa Cimento Sanayi  vs.  Otokar Otomotiv ve

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.

Otokar Otomotiv ve

Risk-Adjusted Performance

1 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Otokar Otomotiv ve are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Otokar Otomotiv 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 Otokar Otomotiv

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

The idea behind Cimsa Cimento Sanayi and Otokar Otomotiv 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 Commodity Directory module to find actively traded commodities issued by global exchanges.