Correlation Between ICBC Turkey and Ozerden Plastik

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

Diversification Opportunities for ICBC Turkey and Ozerden Plastik

0.7

Correlation Coefficient

ICBC Turkey  Ozerden Plastik

Poor diversification

The 3 months correlation between ICBC and Ozerden is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding ICBC Turkey Bank and Ozerden Plastik Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ozerden Plastik 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 Ozerden Plastik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ozerden Plastik Sanayi has no effect on the direction of ICBC Turkey i.e., ICBC Turkey and Ozerden Plastik go up and down completely randomly.

Pair Corralation between ICBC Turkey and Ozerden Plastik

Assuming the 90 days trading horizon ICBC Turkey Bank is expected to generate 0.91 times more return on investment than Ozerden Plastik. However, ICBC Turkey Bank is 1.1 times less risky than Ozerden Plastik. It trades about 0.03 of its potential returns per unit of risk. Ozerden Plastik Sanayi is currently generating about -0.02 per unit of risk. If you would invest  1,268  in ICBC Turkey Bank on October 1, 2024 and sell it today you would earn a total of  162.00  from holding ICBC Turkey Bank or generate 12.78% return on investment over 90 days.

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

ICBC Turkey Bank  vs.  Ozerden Plastik Sanayi

ICBC Turkey Bank

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ICBC Turkey Bank are ranked lower than 6 (%) 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 January 2025.

Ozerden Plastik Sanayi

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ozerden Plastik Sanayi are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Ozerden Plastik is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with ICBC Turkey and Ozerden Plastik

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

The idea behind ICBC Turkey Bank and Ozerden Plastik 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.

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 Transaction History module to view history of all your transactions and understand their impact on performance.