Correlation Between Kordsa Global and Cimsa Cimento

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

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

Diversification Opportunities for Kordsa Global and Cimsa Cimento

0.13

Correlation Coefficient

Kordsa Global  Cimsa Cimento

Average diversification

The 3 months correlation between Kordsa and Cimsa is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Kordsa Global Endustriyel and Cimsa Cimento Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cimsa Cimento Sanayi and Kordsa Global 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 Kordsa Global Endustriyel are associated (or correlated) with Cimsa Cimento. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cimsa Cimento Sanayi has no effect on the direction of Kordsa Global i.e., Kordsa Global and Cimsa Cimento go up and down completely randomly.

Pair Corralation between Kordsa Global and Cimsa Cimento

Assuming the 90 days trading horizon Kordsa Global Endustriyel is expected to under-perform the Cimsa Cimento. But the stock apears to be less risky and, when comparing its historical volatility, Kordsa Global Endustriyel is 1.5 times less risky than Cimsa Cimento. The stock trades about 0.0 of its potential returns per unit of risk. The Cimsa Cimento Sanayi is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  3,586  in Cimsa Cimento Sanayi on September 14, 2024 and sell it today you would earn a total of  676.00  from holding Cimsa Cimento Sanayi or generate 18.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Kordsa Global Endustriyel  vs.  Cimsa Cimento Sanayi

Kordsa Global Endustriyel

Risk-Adjusted Performance

0 of 100

Very Weak

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

Cimsa Cimento Sanayi

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cimsa Cimento Sanayi are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, Cimsa Cimento demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kordsa Global and Cimsa Cimento

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

The idea behind Kordsa Global Endustriyel and Cimsa 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.

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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.