Correlation Between ICBC Turkey and MMC Sanayi

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

Diversification Opportunities for ICBC Turkey and MMC Sanayi

-0.14

Correlation Coefficient

ICBC Turkey  MMC Sanayi

Good diversification

The 3 months correlation between ICBC and MMC is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding ICBC Turkey Bank and MMC Sanayi ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MMC Sanayi ve 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 MMC Sanayi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MMC Sanayi ve has no effect on the direction of ICBC Turkey i.e., ICBC Turkey and MMC Sanayi go up and down completely randomly.

Pair Corralation between ICBC Turkey and MMC Sanayi

Assuming the 90 days trading horizon ICBC Turkey Bank is expected to under-perform the MMC Sanayi. But the stock apears to be less risky and, when comparing its historical volatility, ICBC Turkey Bank is 1.13 times less risky than MMC Sanayi. The stock trades about -0.07 of its potential returns per unit of risk. The MMC Sanayi ve is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,972  in MMC Sanayi ve on December 22, 2024 and sell it today you would earn a total of  158.00  from holding MMC Sanayi ve or generate 8.01% return on investment over 90 days.

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

ICBC Turkey Bank  vs.  MMC Sanayi ve

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 latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

MMC Sanayi ve

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MMC Sanayi ve are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, MMC Sanayi may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with ICBC Turkey and MMC Sanayi

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

The idea behind ICBC Turkey Bank and MMC Sanayi ve 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.