Correlation Between Cuhadaroglu Metal and Vestel Beyaz

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

Diversification Opportunities for Cuhadaroglu Metal and Vestel Beyaz

0.93

Correlation Coefficient

Cuhadaroglu Metal  Vestel Beyaz

Almost no diversification

The 3 months correlation between Cuhadaroglu and Vestel is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Cuhadaroglu Metal Sanayi and Vestel Beyaz Esya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestel Beyaz Esya 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 Vestel Beyaz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestel Beyaz Esya has no effect on the direction of Cuhadaroglu Metal i.e., Cuhadaroglu Metal and Vestel Beyaz go up and down completely randomly.

Pair Corralation between Cuhadaroglu Metal and Vestel Beyaz

Assuming the 90 days trading horizon Cuhadaroglu Metal Sanayi is expected to generate 1.43 times more return on investment than Vestel Beyaz. However, Cuhadaroglu Metal is 1.43 times more volatile than Vestel Beyaz Esya. It trades about -0.14 of its potential returns per unit of risk. Vestel Beyaz Esya is currently generating about -0.23 per unit of risk. If you would invest  2,798  in Cuhadaroglu Metal Sanayi on December 27, 2024 and sell it today you would lose (666.00) from holding Cuhadaroglu Metal Sanayi or give up 23.8% of portfolio value over 90 days.

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

Cuhadaroglu Metal Sanayi  vs.  Vestel Beyaz Esya

Cuhadaroglu Metal Sanayi

Risk-Adjusted Performance

Very Weak

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

Vestel Beyaz Esya

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Cuhadaroglu Metal and Vestel Beyaz

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

The idea behind Cuhadaroglu Metal Sanayi and Vestel Beyaz Esya 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.