Correlation Between ICBC Turkey and Kent Gida

Can any of the company-specific risk be diversified away by investing in both ICBC Turkey and Kent Gida 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 Kent Gida 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 Kent Gida Maddeleri, you can compare the effects of market volatilities on ICBC Turkey and Kent Gida 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 Kent Gida. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICBC Turkey and Kent Gida.

Diversification Opportunities for ICBC Turkey and Kent Gida

0.53

Correlation Coefficient

ICBC Turkey  Kent Gida

Very weak diversification

The 3 months correlation between ICBC and Kent is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding ICBC Turkey Bank and Kent Gida Maddeleri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kent Gida Maddeleri 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 Kent Gida. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kent Gida Maddeleri has no effect on the direction of ICBC Turkey i.e., ICBC Turkey and Kent Gida go up and down completely randomly.

Pair Corralation between ICBC Turkey and Kent Gida

Assuming the 90 days trading horizon ICBC Turkey Bank is expected to under-perform the Kent Gida. But the stock apears to be less risky and, when comparing its historical volatility, ICBC Turkey Bank is 2.35 times less risky than Kent Gida. The stock trades about -0.02 of its potential returns per unit of risk. The Kent Gida Maddeleri is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  83,550  in Kent Gida Maddeleri on October 9, 2024 and sell it today you would earn a total of  15,850  from holding Kent Gida Maddeleri or generate 18.97% return on investment over 90 days.

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

ICBC Turkey Bank  vs.  Kent Gida Maddeleri

ICBC Turkey Bank

Risk-Adjusted Performance

11 of 100

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.

Kent Gida Maddeleri

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kent Gida Maddeleri are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Kent Gida unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ICBC Turkey and Kent Gida

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

The idea behind ICBC Turkey Bank and Kent Gida Maddeleri 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.