Correlation Between Nuh Cimento and Oyak Cimento

Can any of the company-specific risk be diversified away by investing in both Nuh Cimento and Oyak 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 Nuh Cimento and Oyak Cimento 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 Oyak Cimento Fabrikalari, you can compare the effects of market volatilities on Nuh Cimento and Oyak 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 Nuh Cimento with a short position of Oyak Cimento. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuh Cimento and Oyak Cimento.

Diversification Opportunities for Nuh Cimento and Oyak Cimento

0.5

Correlation Coefficient

Nuh Cimento  Oyak Cimento

Very weak diversification

The 3 months correlation between Nuh and Oyak is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Nuh Cimento Sanayi and Oyak Cimento Fabrikalari in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oyak Cimento Fabrikalari 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 Oyak Cimento. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oyak Cimento Fabrikalari has no effect on the direction of Nuh Cimento i.e., Nuh Cimento and Oyak Cimento go up and down completely randomly.

Pair Corralation between Nuh Cimento and Oyak Cimento

Assuming the 90 days trading horizon Nuh Cimento is expected to generate 2.47 times less return on investment than Oyak Cimento. But when comparing it to its historical volatility, Nuh Cimento Sanayi is 3.51 times less risky than Oyak Cimento. It trades about 0.08 of its potential returns per unit of risk. Oyak Cimento Fabrikalari is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  596.00  in Oyak Cimento Fabrikalari on October 12, 2024 and sell it today you would earn a total of  1,752  from holding Oyak Cimento Fabrikalari or generate 293.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Nuh Cimento Sanayi  vs.  Oyak Cimento Fabrikalari

Nuh Cimento Sanayi

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nuh Cimento Sanayi are ranked lower than 8 (%) 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.

Oyak Cimento Fabrikalari

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Oyak Cimento Fabrikalari are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak forward indicators, Oyak Cimento demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nuh Cimento and Oyak Cimento

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

The idea behind Nuh Cimento Sanayi and Oyak Cimento Fabrikalari 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.