Correlation Between Cuhadaroglu Metal and Borusan Yatirim

Can any of the company-specific risk be diversified away by investing in both Cuhadaroglu Metal and Borusan Yatirim 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 Cuhadaroglu Metal and Borusan Yatirim into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cuhadaroglu Metal Sanayi and Borusan Yatirim ve, you can compare the effects of market volatilities on Cuhadaroglu Metal and Borusan Yatirim 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 Cuhadaroglu Metal with a short position of Borusan Yatirim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cuhadaroglu Metal and Borusan Yatirim.

Diversification Opportunities for Cuhadaroglu Metal and Borusan Yatirim

0.17

Correlation Coefficient

Cuhadaroglu Metal  Borusan Yatirim

Average diversification

The 3 months correlation between Cuhadaroglu and Borusan is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Cuhadaroglu Metal Sanayi and Borusan Yatirim ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Borusan Yatirim ve and Cuhadaroglu Metal 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 Cuhadaroglu Metal Sanayi are associated (or correlated) with Borusan Yatirim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Borusan Yatirim ve has no effect on the direction of Cuhadaroglu Metal i.e., Cuhadaroglu Metal and Borusan Yatirim go up and down completely randomly.

Pair Corralation between Cuhadaroglu Metal and Borusan Yatirim

Assuming the 90 days trading horizon Cuhadaroglu Metal Sanayi is expected to generate 1.7 times more return on investment than Borusan Yatirim. However, Cuhadaroglu Metal is 1.7 times more volatile than Borusan Yatirim ve. It trades about -0.28 of its potential returns per unit of risk. Borusan Yatirim ve is currently generating about -0.52 per unit of risk. If you would invest  2,800  in Cuhadaroglu Metal Sanayi on October 26, 2024 and sell it today you would lose (288.00) from holding Cuhadaroglu Metal Sanayi or give up 10.29% of portfolio value over 90 days.

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

Cuhadaroglu Metal Sanayi  vs.  Borusan Yatirim ve

Cuhadaroglu Metal Sanayi

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cuhadaroglu Metal Sanayi are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Cuhadaroglu Metal demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Borusan Yatirim ve

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Cuhadaroglu Metal and Borusan Yatirim

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

The idea behind Cuhadaroglu Metal Sanayi and Borusan Yatirim 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.