Correlation Between Kardemir Karabuk and Silverline Endustri

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

Diversification Opportunities for Kardemir Karabuk and Silverline Endustri

0.44

Correlation Coefficient

Kardemir Karabuk  Silverline Endustri

Very weak diversification

The 3 months correlation between Kardemir and Silverline is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Kardemir Karabuk Demir and Silverline Endustri ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silverline Endustri 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 Silverline Endustri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silverline Endustri has no effect on the direction of Kardemir Karabuk i.e., Kardemir Karabuk and Silverline Endustri go up and down completely randomly.

Pair Corralation between Kardemir Karabuk and Silverline Endustri

Assuming the 90 days trading horizon Kardemir Karabuk Demir is expected to generate 1.22 times more return on investment than Silverline Endustri. However, Kardemir Karabuk is 1.22 times more volatile than Silverline Endustri ve. It trades about 0.29 of its potential returns per unit of risk. Silverline Endustri ve is currently generating about 0.04 per unit of risk. If you would invest  2,628  in Kardemir Karabuk Demir on September 17, 2024 and sell it today you would earn a total of  420.00  from holding Kardemir Karabuk Demir or generate 15.98% return on investment over 90 days.

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

Kardemir Karabuk Demir  vs.  Silverline Endustri ve

Kardemir Karabuk Demir

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kardemir Karabuk Demir are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Kardemir Karabuk demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Silverline Endustri

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Silverline Endustri ve are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Silverline Endustri demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kardemir Karabuk and Silverline Endustri

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

The idea behind Kardemir Karabuk Demir and Silverline Endustri ve 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 Anywhere module to track or share privately all of your investments from the convenience of any device.