Correlation Between Kardemir Karabuk and Ayes Celik

Can any of the company-specific risk be diversified away by investing in both Kardemir Karabuk and Ayes Celik 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 Kardemir Karabuk and Ayes Celik into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kardemir Karabuk Demir and Ayes Celik Hasir, you can compare the effects of market volatilities on Kardemir Karabuk and Ayes Celik 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 Kardemir Karabuk with a short position of Ayes Celik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kardemir Karabuk and Ayes Celik.

Diversification Opportunities for Kardemir Karabuk and Ayes Celik

0.22

Correlation Coefficient

Kardemir Karabuk  Ayes Celik

Modest diversification

The 3 months correlation between Kardemir and Ayes is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Kardemir Karabuk Demir and Ayes Celik Hasir in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ayes Celik Hasir and Kardemir Karabuk 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 Kardemir Karabuk Demir are associated (or correlated) with Ayes Celik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ayes Celik Hasir has no effect on the direction of Kardemir Karabuk i.e., Kardemir Karabuk and Ayes Celik go up and down completely randomly.

Pair Corralation between Kardemir Karabuk and Ayes Celik

Assuming the 90 days trading horizon Kardemir Karabuk is expected to generate 1.84 times less return on investment than Ayes Celik. In addition to that, Kardemir Karabuk is 1.03 times more volatile than Ayes Celik Hasir. It trades about 0.03 of its total potential returns per unit of risk. Ayes Celik Hasir is currently generating about 0.06 per unit of volatility. If you would invest  834.00  in Ayes Celik Hasir on December 4, 2024 and sell it today you would earn a total of  56.00  from holding Ayes Celik Hasir or generate 6.71% return on investment over 90 days.

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

Kardemir Karabuk Demir  vs.  Ayes Celik Hasir

Kardemir Karabuk Demir

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kardemir Karabuk Demir are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Kardemir Karabuk is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Ayes Celik Hasir

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ayes Celik Hasir are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Ayes Celik may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Kardemir Karabuk and Ayes Celik

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

The idea behind Kardemir Karabuk Demir and Ayes Celik Hasir 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.