Correlation Between Eregli Demir and Izmir Demir
Can any of the company-specific risk be diversified away by investing in both Eregli Demir and Izmir Demir 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 Izmir Demir 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 Izmir Demir Celik, you can compare the effects of market volatilities on Eregli Demir and Izmir Demir 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 Izmir Demir. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eregli Demir and Izmir Demir.
Diversification Opportunities for Eregli Demir and Izmir Demir
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eregli and Izmir is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Eregli Demir ve and Izmir Demir Celik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Izmir Demir Celik 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 Izmir Demir. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Izmir Demir Celik has no effect on the direction of Eregli Demir i.e., Eregli Demir and Izmir Demir go up and down completely randomly.
Pair Corralation between Eregli Demir and Izmir Demir
Assuming the 90 days trading horizon Eregli Demir is expected to generate 1.63 times less return on investment than Izmir Demir. But when comparing it to its historical volatility, Eregli Demir ve is 1.21 times less risky than Izmir Demir. It trades about 0.02 of its potential returns per unit of risk. Izmir Demir Celik is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 557.00 in Izmir Demir Celik on September 23, 2024 and sell it today you would earn a total of 17.00 from holding Izmir Demir Celik or generate 3.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Eregli Demir ve vs. Izmir Demir Celik
Performance |
Timeline |
Eregli Demir ve |
Izmir Demir Celik |
Eregli Demir and Izmir Demir Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eregli Demir and Izmir Demir
The main advantage of trading using opposite Eregli Demir and Izmir Demir positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eregli Demir position performs unexpectedly, Izmir Demir 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 Izmir Demir will offset losses from the drop in Izmir Demir's long position.Eregli Demir vs. Ege Endustri ve | Eregli Demir vs. Bosch Fren Sistemleri | Eregli Demir vs. Dogus Otomotiv Servis | Eregli Demir vs. Nuh Cimento Sanayi |
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Check out your portfolio center.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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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