Correlation Between Iskenderun Demir and Akcansa Cimento

Can any of the company-specific risk be diversified away by investing in both Iskenderun Demir and Akcansa 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 Iskenderun Demir and Akcansa Cimento into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Iskenderun Demir ve and Akcansa Cimento Sanayi, you can compare the effects of market volatilities on Iskenderun Demir and Akcansa 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 Iskenderun Demir with a short position of Akcansa Cimento. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iskenderun Demir and Akcansa Cimento.

Diversification Opportunities for Iskenderun Demir and Akcansa Cimento

0.92

Correlation Coefficient

Iskenderun Demir  Akcansa Cimento

Almost no diversification

The 3 months correlation between Iskenderun and Akcansa is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Iskenderun Demir ve and Akcansa Cimento Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akcansa Cimento Sanayi and Iskenderun Demir 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 Iskenderun Demir ve are associated (or correlated) with Akcansa Cimento. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akcansa Cimento Sanayi has no effect on the direction of Iskenderun Demir i.e., Iskenderun Demir and Akcansa Cimento go up and down completely randomly.

Pair Corralation between Iskenderun Demir and Akcansa Cimento

Assuming the 90 days trading horizon Iskenderun Demir ve is expected to generate 0.7 times more return on investment than Akcansa Cimento. However, Iskenderun Demir ve is 1.42 times less risky than Akcansa Cimento. It trades about 0.13 of its potential returns per unit of risk. Akcansa Cimento Sanayi is currently generating about 0.09 per unit of risk. If you would invest  3,544  in Iskenderun Demir ve on October 5, 2024 and sell it today you would earn a total of  534.00  from holding Iskenderun Demir ve or generate 15.07% return on investment over 90 days.

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

Iskenderun Demir ve  vs.  Akcansa Cimento Sanayi

Iskenderun Demir

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Iskenderun Demir ve are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Iskenderun Demir demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Akcansa Cimento Sanayi

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Akcansa Cimento Sanayi are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Akcansa Cimento demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Iskenderun Demir and Akcansa Cimento

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

The idea behind Iskenderun Demir ve and Akcansa 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.