Correlation Between ICBC Turkey and Naturel Yenilenebilir

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

Diversification Opportunities for ICBC Turkey and Naturel Yenilenebilir

0.43

Correlation Coefficient

ICBC Turkey  Naturel Yenilenebilir

Very weak diversification

The 3 months correlation between ICBC and Naturel is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding ICBC Turkey Bank and Naturel Yenilenebilir Enerji in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naturel Yenilenebilir 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 Naturel Yenilenebilir. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naturel Yenilenebilir has no effect on the direction of ICBC Turkey i.e., ICBC Turkey and Naturel Yenilenebilir go up and down completely randomly.

Pair Corralation between ICBC Turkey and Naturel Yenilenebilir

Assuming the 90 days trading horizon ICBC Turkey is expected to generate 7.18 times less return on investment than Naturel Yenilenebilir. But when comparing it to its historical volatility, ICBC Turkey Bank is 5.65 times less risky than Naturel Yenilenebilir. It trades about 0.04 of its potential returns per unit of risk. Naturel Yenilenebilir Enerji is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  2,592  in Naturel Yenilenebilir Enerji on October 26, 2024 and sell it today you would earn a total of  6,308  from holding Naturel Yenilenebilir Enerji or generate 243.36% 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.  Naturel Yenilenebilir Enerji

ICBC Turkey Bank

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ICBC Turkey Bank are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, ICBC Turkey may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Naturel Yenilenebilir

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Naturel Yenilenebilir Enerji are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Naturel Yenilenebilir demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ICBC Turkey and Naturel Yenilenebilir

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

The idea behind ICBC Turkey Bank and Naturel Yenilenebilir Enerji 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.