Correlation Between Ege Endustri and Cimsa Cimento

Can any of the company-specific risk be diversified away by investing in both Ege Endustri and Cimsa Cimento 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 Ege Endustri and Cimsa Cimento into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Ege Endustri and Cimsa Cimento

-0.64

Correlation Coefficient

Ege Endustri  Cimsa Cimento

Excellent diversification

The 3 months correlation between Ege and Cimsa is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Ege Endustri ve and Cimsa Cimento Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cimsa Cimento Sanayi and Ege Endustri 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 Ege Endustri ve are associated (or correlated) with Cimsa Cimento. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cimsa Cimento Sanayi has no effect on the direction of Ege Endustri i.e., Ege Endustri and Cimsa Cimento go up and down completely randomly.

Pair Corralation between Ege Endustri and Cimsa Cimento

Assuming the 90 days trading horizon Ege Endustri ve is expected to generate 0.66 times more return on investment than Cimsa Cimento. However, Ege Endustri ve is 1.52 times less risky than Cimsa Cimento. It trades about -0.14 of its potential returns per unit of risk. Cimsa Cimento Sanayi is currently generating about -0.34 per unit of risk. If you would invest  925,250  in Ege Endustri ve on December 4, 2024 and sell it today you would lose (45,250) from holding Ege Endustri ve or give up 4.89% of portfolio value over 90 days.

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

Ege Endustri ve  vs.  Cimsa Cimento Sanayi

Ege Endustri ve

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ege Endustri ve 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.

Cimsa Cimento Sanayi

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cimsa Cimento Sanayi are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, Cimsa Cimento demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ege Endustri and Cimsa Cimento

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

The idea behind Ege Endustri ve and Cimsa Cimento Sanayi 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.