Correlation Between ICBC Turkey and Smart Gunes

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

Diversification Opportunities for ICBC Turkey and Smart Gunes

0.69

Correlation Coefficient

ICBC Turkey  Smart Gunes

Poor diversification

The 3 months correlation between ICBC and Smart is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding ICBC Turkey Bank and Smart Gunes Enerjisi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smart Gunes Enerjisi 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 Smart Gunes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smart Gunes Enerjisi has no effect on the direction of ICBC Turkey i.e., ICBC Turkey and Smart Gunes go up and down completely randomly.

Pair Corralation between ICBC Turkey and Smart Gunes

Assuming the 90 days trading horizon ICBC Turkey is expected to generate 7.83 times less return on investment than Smart Gunes. In addition to that, ICBC Turkey is 1.26 times more volatile than Smart Gunes Enerjisi. It trades about 0.01 of its total potential returns per unit of risk. Smart Gunes Enerjisi is currently generating about 0.12 per unit of volatility. If you would invest  3,814  in Smart Gunes Enerjisi on September 23, 2024 and sell it today you would earn a total of  186.00  from holding Smart Gunes Enerjisi or generate 4.88% 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.  Smart Gunes Enerjisi

ICBC Turkey Bank

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ICBC Turkey Bank are ranked lower than 1 (%) 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 newest stock price confusion, may contribute to short-horizon losses for the traders.

Smart Gunes Enerjisi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Smart Gunes Enerjisi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Smart Gunes 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 Smart Gunes

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

The idea behind ICBC Turkey Bank and Smart Gunes Enerjisi 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.