Correlation Between Cuhadaroglu Metal and Global Yatirim

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

Diversification Opportunities for Cuhadaroglu Metal and Global Yatirim

0.54

Correlation Coefficient

Cuhadaroglu Metal  Global Yatirim

Very weak diversification

The 3 months correlation between Cuhadaroglu and Global is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Cuhadaroglu Metal Sanayi and Global Yatirim Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Yatirim Holding 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 Global Yatirim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Yatirim Holding has no effect on the direction of Cuhadaroglu Metal i.e., Cuhadaroglu Metal and Global Yatirim go up and down completely randomly.

Pair Corralation between Cuhadaroglu Metal and Global Yatirim

Assuming the 90 days trading horizon Cuhadaroglu Metal is expected to generate 1.46 times less return on investment than Global Yatirim. In addition to that, Cuhadaroglu Metal is 1.15 times more volatile than Global Yatirim Holding. It trades about 0.04 of its total potential returns per unit of risk. Global Yatirim Holding is currently generating about 0.07 per unit of volatility. If you would invest  1,264  in Global Yatirim Holding on October 7, 2024 and sell it today you would earn a total of  536.00  from holding Global Yatirim Holding or generate 42.41% return on investment over 90 days.

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

Cuhadaroglu Metal Sanayi  vs.  Global Yatirim Holding

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.

Global Yatirim Holding

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Global Yatirim Holding are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Global Yatirim demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cuhadaroglu Metal and Global Yatirim

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

The idea behind Cuhadaroglu Metal Sanayi and Global Yatirim Holding 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.