Correlation Between Iskenderun Demir and Federal Mogul

Can any of the company-specific risk be diversified away by investing in both Iskenderun Demir and Federal Mogul 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 Federal Mogul 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 Federal Mogul Izmit, you can compare the effects of market volatilities on Iskenderun Demir and Federal Mogul 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 Federal Mogul. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iskenderun Demir and Federal Mogul.

Diversification Opportunities for Iskenderun Demir and Federal Mogul

0.3

Correlation Coefficient

Iskenderun Demir  Federal Mogul

Weak diversification

The 3 months correlation between Iskenderun and Federal is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Iskenderun Demir ve and Federal Mogul Izmit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Mogul Izmit 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 Federal Mogul. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Mogul Izmit has no effect on the direction of Iskenderun Demir i.e., Iskenderun Demir and Federal Mogul go up and down completely randomly.

Pair Corralation between Iskenderun Demir and Federal Mogul

Assuming the 90 days trading horizon Iskenderun Demir ve is expected to generate 1.56 times more return on investment than Federal Mogul. However, Iskenderun Demir is 1.56 times more volatile than Federal Mogul Izmit. It trades about 0.2 of its potential returns per unit of risk. Federal Mogul Izmit is currently generating about 0.18 per unit of risk. If you would invest  3,736  in Iskenderun Demir ve on September 23, 2024 and sell it today you would earn a total of  422.00  from holding Iskenderun Demir ve or generate 11.3% return on investment over 90 days.

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

Iskenderun Demir ve  vs.  Federal Mogul Izmit

Iskenderun Demir

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Iskenderun Demir ve are ranked lower than 11 (%) 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.

Federal Mogul Izmit

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Federal Mogul Izmit has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Federal Mogul is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Iskenderun Demir and Federal Mogul

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

The idea behind Iskenderun Demir ve and Federal Mogul Izmit 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.