Correlation Between ICBC Turkey and Konya Cimento

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

Diversification Opportunities for ICBC Turkey and Konya Cimento

0.77

Correlation Coefficient

ICBC Turkey  Konya Cimento

Poor diversification

The 3 months correlation between ICBC and Konya is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding ICBC Turkey Bank and Konya Cimento Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konya Cimento Sanayi 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 Konya Cimento. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konya Cimento Sanayi has no effect on the direction of ICBC Turkey i.e., ICBC Turkey and Konya Cimento go up and down completely randomly.

Pair Corralation between ICBC Turkey and Konya Cimento

Assuming the 90 days trading horizon ICBC Turkey Bank is expected to generate 1.09 times more return on investment than Konya Cimento. However, ICBC Turkey is 1.09 times more volatile than Konya Cimento Sanayi. It trades about -0.02 of its potential returns per unit of risk. Konya Cimento Sanayi is currently generating about -0.11 per unit of risk. If you would invest  1,430  in ICBC Turkey Bank on December 27, 2024 and sell it today you would lose (71.00) from holding ICBC Turkey Bank or give up 4.97% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

ICBC Turkey Bank  vs.  Konya Cimento Sanayi

ICBC Turkey Bank

Risk-Adjusted Performance

Very Weak

Over the last 90 days ICBC Turkey Bank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, ICBC Turkey is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Konya Cimento Sanayi

Risk-Adjusted Performance

Very Weak

Over the last 90 days Konya Cimento Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with ICBC Turkey and Konya Cimento

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

The idea behind ICBC Turkey Bank and Konya Cimento 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.