Correlation Between Gubre Fabrikalari and Federal Mogul
Can any of the company-specific risk be diversified away by investing in both Gubre Fabrikalari and Federal Mogul 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 Gubre Fabrikalari and Federal Mogul into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gubre Fabrikalari TAS and Federal Mogul Izmit, you can compare the effects of market volatilities on Gubre Fabrikalari and Federal Mogul 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 Gubre Fabrikalari with a short position of Federal Mogul. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gubre Fabrikalari and Federal Mogul.
Diversification Opportunities for Gubre Fabrikalari and Federal Mogul
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gubre and Federal is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Gubre Fabrikalari TAS and Federal Mogul Izmit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Mogul Izmit and Gubre Fabrikalari 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 Gubre Fabrikalari TAS are associated (or correlated) with Federal Mogul. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Mogul Izmit has no effect on the direction of Gubre Fabrikalari i.e., Gubre Fabrikalari and Federal Mogul go up and down completely randomly.
Pair Corralation between Gubre Fabrikalari and Federal Mogul
Assuming the 90 days trading horizon Gubre Fabrikalari TAS is expected to generate 0.93 times more return on investment than Federal Mogul. However, Gubre Fabrikalari TAS is 1.07 times less risky than Federal Mogul. It trades about 0.62 of its potential returns per unit of risk. Federal Mogul Izmit is currently generating about 0.07 per unit of risk. If you would invest 22,250 in Gubre Fabrikalari TAS on September 25, 2024 and sell it today you would earn a total of 5,625 from holding Gubre Fabrikalari TAS or generate 25.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Gubre Fabrikalari TAS vs. Federal Mogul Izmit
Performance |
Timeline |
Gubre Fabrikalari TAS |
Federal Mogul Izmit |
Gubre Fabrikalari and Federal Mogul Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gubre Fabrikalari and Federal Mogul
The main advantage of trading using opposite Gubre Fabrikalari and Federal Mogul positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gubre Fabrikalari position performs unexpectedly, Federal Mogul 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 Federal Mogul will offset losses from the drop in Federal Mogul's long position.Gubre Fabrikalari vs. SASA Polyester Sanayi | Gubre Fabrikalari vs. Koza Altin Isletmeleri | Gubre Fabrikalari vs. Kardemir Karabuk Demir | Gubre Fabrikalari vs. Hektas Ticaret TAS |
Federal Mogul vs. Tofas Turk Otomobil | Federal Mogul vs. Hektas Ticaret TAS | Federal Mogul vs. Eregli Demir ve |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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