Correlation Between ICBC Turkey and Birlik Mensucat

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Can any of the company-specific risk be diversified away by investing in both ICBC Turkey and Birlik Mensucat 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 ICBC Turkey and Birlik Mensucat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICBC Turkey Bank and Birlik Mensucat Ticaret, you can compare the effects of market volatilities on ICBC Turkey and Birlik Mensucat 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 ICBC Turkey with a short position of Birlik Mensucat. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICBC Turkey and Birlik Mensucat.

Diversification Opportunities for ICBC Turkey and Birlik Mensucat

0.55
  Correlation Coefficient

Very weak diversification

The 3 months correlation between ICBC and Birlik is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding ICBC Turkey Bank and Birlik Mensucat Ticaret in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Birlik Mensucat Ticaret and ICBC Turkey 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 ICBC Turkey Bank are associated (or correlated) with Birlik Mensucat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Birlik Mensucat Ticaret has no effect on the direction of ICBC Turkey i.e., ICBC Turkey and Birlik Mensucat go up and down completely randomly.

Pair Corralation between ICBC Turkey and Birlik Mensucat

Assuming the 90 days trading horizon ICBC Turkey Bank is expected to generate 0.61 times more return on investment than Birlik Mensucat. However, ICBC Turkey Bank is 1.65 times less risky than Birlik Mensucat. It trades about -0.02 of its potential returns per unit of risk. Birlik Mensucat Ticaret is currently generating about -0.16 per unit of risk. If you would invest  1,533  in ICBC Turkey Bank on October 9, 2024 and sell it today you would lose (18.00) from holding ICBC Turkey Bank or give up 1.17% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

ICBC Turkey Bank  vs.  Birlik Mensucat Ticaret

 Performance 
       Timeline  
ICBC Turkey Bank 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in ICBC Turkey Bank are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, ICBC Turkey demonstrated solid returns over the last few months and may actually be approaching a breakup point.
Birlik Mensucat Ticaret 

Risk-Adjusted Performance

6 of 100

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

ICBC Turkey and Birlik Mensucat Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ICBC Turkey and Birlik Mensucat

The main advantage of trading using opposite ICBC Turkey and Birlik Mensucat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICBC Turkey position performs unexpectedly, Birlik Mensucat 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 Birlik Mensucat will offset losses from the drop in Birlik Mensucat's long position.
The idea behind ICBC Turkey Bank and Birlik Mensucat Ticaret 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.
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.

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