Correlation Between Nuh Cimento and Kartonsan Karton

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

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

Diversification Opportunities for Nuh Cimento and Kartonsan Karton

0.26

Correlation Coefficient

Nuh Cimento  Kartonsan Karton

Modest diversification

The 3 months correlation between Nuh and Kartonsan is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Nuh Cimento Sanayi and Kartonsan Karton Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kartonsan Karton Sanayi and Nuh Cimento 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 Nuh Cimento Sanayi are associated (or correlated) with Kartonsan Karton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kartonsan Karton Sanayi has no effect on the direction of Nuh Cimento i.e., Nuh Cimento and Kartonsan Karton go up and down completely randomly.

Pair Corralation between Nuh Cimento and Kartonsan Karton

Assuming the 90 days trading horizon Nuh Cimento Sanayi is expected to under-perform the Kartonsan Karton. But the stock apears to be less risky and, when comparing its historical volatility, Nuh Cimento Sanayi is 3.48 times less risky than Kartonsan Karton. The stock trades about -0.15 of its potential returns per unit of risk. The Kartonsan Karton Sanayi is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  8,840  in Kartonsan Karton Sanayi on October 20, 2024 and sell it today you would earn a total of  2,390  from holding Kartonsan Karton Sanayi or generate 27.04% return on investment over 90 days.

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

Nuh Cimento Sanayi  vs.  Kartonsan Karton Sanayi

Nuh Cimento Sanayi

Risk-Adjusted Performance

7 of 100

OK

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

Kartonsan Karton Sanayi

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kartonsan Karton Sanayi are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Kartonsan Karton demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nuh Cimento and Kartonsan Karton

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

The idea behind Nuh Cimento Sanayi and Kartonsan Karton 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.