Correlation Between Iskenderun Demir and Sekerbank TAS

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

Diversification Opportunities for Iskenderun Demir and Sekerbank TAS

0.77

Correlation Coefficient

Iskenderun Demir  Sekerbank TAS

Poor diversification

The 3 months correlation between Iskenderun and Sekerbank is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Iskenderun Demir ve and Sekerbank TAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sekerbank TAS 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 Sekerbank TAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sekerbank TAS has no effect on the direction of Iskenderun Demir i.e., Iskenderun Demir and Sekerbank TAS go up and down completely randomly.

Pair Corralation between Iskenderun Demir and Sekerbank TAS

Assuming the 90 days trading horizon Iskenderun Demir is expected to generate 1.61 times less return on investment than Sekerbank TAS. But when comparing it to its historical volatility, Iskenderun Demir ve is 1.31 times less risky than Sekerbank TAS. It trades about 0.04 of its potential returns per unit of risk. Sekerbank TAS is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  419.00  in Sekerbank TAS on September 23, 2024 and sell it today you would earn a total of  63.00  from holding Sekerbank TAS or generate 15.04% 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.  Sekerbank TAS

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.

Sekerbank TAS

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sekerbank TAS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Sekerbank TAS is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Iskenderun Demir and Sekerbank TAS

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

The idea behind Iskenderun Demir ve and Sekerbank TAS 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.