Correlation Between ICBC Turkey and Nuh Cimento

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

Diversification Opportunities for ICBC Turkey and Nuh Cimento

0.77

Correlation Coefficient

ICBC Turkey  Nuh Cimento

Poor diversification

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

Pair Corralation between ICBC Turkey and Nuh Cimento

Assuming the 90 days trading horizon ICBC Turkey is expected to generate 5.98 times less return on investment than Nuh Cimento. But when comparing it to its historical volatility, ICBC Turkey Bank is 1.23 times less risky than Nuh Cimento. It trades about 0.03 of its potential returns per unit of risk. Nuh Cimento Sanayi is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  25,050  in Nuh Cimento Sanayi on September 14, 2024 and sell it today you would earn a total of  6,700  from holding Nuh Cimento Sanayi or generate 26.75% return on investment over 90 days.

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

ICBC Turkey Bank  vs.  Nuh Cimento Sanayi

ICBC Turkey Bank

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ICBC Turkey Bank are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

Nuh Cimento Sanayi

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nuh Cimento Sanayi are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, Nuh Cimento demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ICBC Turkey and Nuh Cimento

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

The idea behind ICBC Turkey Bank and Nuh 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.