Correlation Between Eregli Demir and Cemtas Celik

Can any of the company-specific risk be diversified away by investing in both Eregli Demir and Cemtas Celik 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 Eregli Demir and Cemtas Celik into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eregli Demir ve and Cemtas Celik Makina, you can compare the effects of market volatilities on Eregli Demir and Cemtas Celik 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 Eregli Demir with a short position of Cemtas Celik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eregli Demir and Cemtas Celik.

Diversification Opportunities for Eregli Demir and Cemtas Celik

0.63

Correlation Coefficient

Eregli Demir  Cemtas Celik

Poor diversification

The 3 months correlation between Eregli and Cemtas is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Eregli Demir ve and Cemtas Celik Makina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cemtas Celik Makina and Eregli Demir 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 Eregli Demir ve are associated (or correlated) with Cemtas Celik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cemtas Celik Makina has no effect on the direction of Eregli Demir i.e., Eregli Demir and Cemtas Celik go up and down completely randomly.

Pair Corralation between Eregli Demir and Cemtas Celik

Assuming the 90 days trading horizon Eregli Demir ve is expected to under-perform the Cemtas Celik. In addition to that, Eregli Demir is 1.06 times more volatile than Cemtas Celik Makina. It trades about -0.03 of its total potential returns per unit of risk. Cemtas Celik Makina is currently generating about 0.13 per unit of volatility. If you would invest  809.00  in Cemtas Celik Makina on October 11, 2024 and sell it today you would earn a total of  101.00  from holding Cemtas Celik Makina or generate 12.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Eregli Demir ve  vs.  Cemtas Celik Makina

Eregli Demir ve

Risk-Adjusted Performance

0 of 100

Very Weak

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

Cemtas Celik Makina

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cemtas Celik Makina are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Cemtas Celik may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Eregli Demir and Cemtas Celik

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

The idea behind Eregli Demir ve and Cemtas Celik Makina 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.