Correlation Between Creditwest Faktoring and Kardemir Karabuk

Can any of the company-specific risk be diversified away by investing in both Creditwest Faktoring and Kardemir Karabuk 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 Creditwest Faktoring and Kardemir Karabuk into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Creditwest Faktoring AS and Kardemir Karabuk Demir, you can compare the effects of market volatilities on Creditwest Faktoring and Kardemir Karabuk 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 Creditwest Faktoring with a short position of Kardemir Karabuk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Creditwest Faktoring and Kardemir Karabuk.

Diversification Opportunities for Creditwest Faktoring and Kardemir Karabuk

0.35

Correlation Coefficient

Creditwest Faktoring  Kardemir Karabuk

Weak diversification

The 3 months correlation between Creditwest and Kardemir is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Creditwest Faktoring AS and Kardemir Karabuk Demir in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kardemir Karabuk Demir and Creditwest Faktoring 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 Creditwest Faktoring AS are associated (or correlated) with Kardemir Karabuk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kardemir Karabuk Demir has no effect on the direction of Creditwest Faktoring i.e., Creditwest Faktoring and Kardemir Karabuk go up and down completely randomly.

Pair Corralation between Creditwest Faktoring and Kardemir Karabuk

Assuming the 90 days trading horizon Creditwest Faktoring AS is expected to generate 1.31 times more return on investment than Kardemir Karabuk. However, Creditwest Faktoring is 1.31 times more volatile than Kardemir Karabuk Demir. It trades about 0.03 of its potential returns per unit of risk. Kardemir Karabuk Demir is currently generating about 0.04 per unit of risk. If you would invest  475.00  in Creditwest Faktoring AS on September 23, 2024 and sell it today you would earn a total of  137.00  from holding Creditwest Faktoring AS or generate 28.84% return on investment over 90 days.

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

Creditwest Faktoring AS  vs.  Kardemir Karabuk Demir

Creditwest Faktoring

Risk-Adjusted Performance

0 of 100

Very Weak

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

Kardemir Karabuk Demir

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kardemir Karabuk Demir are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Kardemir Karabuk may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Creditwest Faktoring and Kardemir Karabuk

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

The idea behind Creditwest Faktoring AS and Kardemir Karabuk Demir 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.