Correlation Between Iskenderun Demir and Cuhadaroglu Metal
Can any of the company-specific risk be diversified away by investing in both Iskenderun Demir and Cuhadaroglu Metal 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 Cuhadaroglu Metal 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 Cuhadaroglu Metal Sanayi, you can compare the effects of market volatilities on Iskenderun Demir and Cuhadaroglu Metal 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 Cuhadaroglu Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iskenderun Demir and Cuhadaroglu Metal.
Diversification Opportunities for Iskenderun Demir and Cuhadaroglu Metal
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Iskenderun and Cuhadaroglu is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Iskenderun Demir ve and Cuhadaroglu Metal Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cuhadaroglu Metal 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 Cuhadaroglu Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cuhadaroglu Metal Sanayi has no effect on the direction of Iskenderun Demir i.e., Iskenderun Demir and Cuhadaroglu Metal go up and down completely randomly.
Pair Corralation between Iskenderun Demir and Cuhadaroglu Metal
Assuming the 90 days trading horizon Iskenderun Demir is expected to generate 1.38 times less return on investment than Cuhadaroglu Metal. But when comparing it to its historical volatility, Iskenderun Demir ve is 1.29 times less risky than Cuhadaroglu Metal. It trades about 0.03 of its potential returns per unit of risk. Cuhadaroglu Metal Sanayi is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,114 in Cuhadaroglu Metal Sanayi on September 23, 2024 and sell it today you would earn a total of 542.00 from holding Cuhadaroglu Metal Sanayi or generate 25.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Iskenderun Demir ve vs. Cuhadaroglu Metal Sanayi
Performance |
Timeline |
Iskenderun Demir |
Cuhadaroglu Metal Sanayi |
Iskenderun Demir and Cuhadaroglu Metal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Iskenderun Demir and Cuhadaroglu Metal
The main advantage of trading using opposite Iskenderun Demir and Cuhadaroglu Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iskenderun Demir position performs unexpectedly, Cuhadaroglu Metal 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 Cuhadaroglu Metal will offset losses from the drop in Cuhadaroglu Metal's long position.Iskenderun Demir vs. Sekerbank TAS | Iskenderun Demir vs. Cuhadaroglu Metal Sanayi | Iskenderun Demir vs. Sodas Sodyum Sanayi | Iskenderun Demir vs. Qnb Finansbank AS |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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