Correlation Between Cuhadaroglu Metal and Celik Halat

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

Diversification Opportunities for Cuhadaroglu Metal and Celik Halat

-0.75

Correlation Coefficient

Cuhadaroglu Metal  Celik Halat

Pay attention - limited upside

The 3 months correlation between Cuhadaroglu and Celik is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Cuhadaroglu Metal Sanayi and Celik Halat ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celik Halat 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 Celik Halat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celik Halat ve has no effect on the direction of Cuhadaroglu Metal i.e., Cuhadaroglu Metal and Celik Halat go up and down completely randomly.

Pair Corralation between Cuhadaroglu Metal and Celik Halat

Assuming the 90 days trading horizon Cuhadaroglu Metal Sanayi is expected to generate 1.15 times more return on investment than Celik Halat. However, Cuhadaroglu Metal is 1.15 times more volatile than Celik Halat ve. It trades about 0.36 of its potential returns per unit of risk. Celik Halat ve is currently generating about -0.11 per unit of risk. If you would invest  1,927  in Cuhadaroglu Metal Sanayi on October 6, 2024 and sell it today you would earn a total of  891.00  from holding Cuhadaroglu Metal Sanayi or generate 46.24% return on investment over 90 days.

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

Cuhadaroglu Metal Sanayi  vs.  Celik Halat ve

Cuhadaroglu Metal Sanayi

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cuhadaroglu Metal Sanayi are ranked lower than 19 (%) 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.

Celik Halat ve

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Celik Halat ve has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Cuhadaroglu Metal and Celik Halat

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

The idea behind Cuhadaroglu Metal Sanayi and Celik Halat 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.