Correlation Between Girisim Elektrik and Cuhadaroglu Metal

Can any of the company-specific risk be diversified away by investing in both Girisim Elektrik and Cuhadaroglu Metal 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 Girisim Elektrik and Cuhadaroglu Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Girisim Elektrik Taahhut and Cuhadaroglu Metal Sanayi, you can compare the effects of market volatilities on Girisim Elektrik and Cuhadaroglu Metal 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 Girisim Elektrik with a short position of Cuhadaroglu Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Girisim Elektrik and Cuhadaroglu Metal.

Diversification Opportunities for Girisim Elektrik and Cuhadaroglu Metal

0.51

Correlation Coefficient

Girisim Elektrik  Cuhadaroglu Metal

Very weak diversification

The 3 months correlation between Girisim and Cuhadaroglu is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Girisim Elektrik Taahhut and Cuhadaroglu Metal Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cuhadaroglu Metal Sanayi and Girisim Elektrik 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 Girisim Elektrik Taahhut are associated (or correlated) with Cuhadaroglu Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cuhadaroglu Metal Sanayi has no effect on the direction of Girisim Elektrik i.e., Girisim Elektrik and Cuhadaroglu Metal go up and down completely randomly.

Pair Corralation between Girisim Elektrik and Cuhadaroglu Metal

Assuming the 90 days trading horizon Girisim Elektrik is expected to generate 11.69 times less return on investment than Cuhadaroglu Metal. But when comparing it to its historical volatility, Girisim Elektrik Taahhut is 1.11 times less risky than Cuhadaroglu Metal. It trades about 0.04 of its potential returns per unit of risk. Cuhadaroglu Metal Sanayi is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest  2,170  in Cuhadaroglu Metal Sanayi on October 8, 2024 and sell it today you would earn a total of  670.00  from holding Cuhadaroglu Metal Sanayi or generate 30.88% return on investment over 90 days.

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

Girisim Elektrik Taahhut  vs.  Cuhadaroglu Metal Sanayi

Girisim Elektrik Taahhut

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Girisim Elektrik Taahhut are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Girisim Elektrik demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Girisim Elektrik and Cuhadaroglu Metal

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

The idea behind Girisim Elektrik Taahhut and Cuhadaroglu Metal 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.