Correlation Between Nuh Cimento and SASA Polyester

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

Diversification Opportunities for Nuh Cimento and SASA Polyester

0.58

Correlation Coefficient

Nuh Cimento  SASA Polyester

Very weak diversification

The 3 months correlation between Nuh and SASA is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Nuh Cimento Sanayi and SASA Polyester Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SASA Polyester 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 SASA Polyester. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SASA Polyester Sanayi has no effect on the direction of Nuh Cimento i.e., Nuh Cimento and SASA Polyester go up and down completely randomly.

Pair Corralation between Nuh Cimento and SASA Polyester

Assuming the 90 days trading horizon Nuh Cimento Sanayi is expected to generate 1.24 times more return on investment than SASA Polyester. However, Nuh Cimento is 1.24 times more volatile than SASA Polyester Sanayi. It trades about 0.11 of its potential returns per unit of risk. SASA Polyester Sanayi is currently generating about 0.03 per unit of risk. If you would invest  25,425  in Nuh Cimento Sanayi on October 2, 2024 and sell it today you would earn a total of  4,550  from holding Nuh Cimento Sanayi or generate 17.9% return on investment over 90 days.

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

Nuh Cimento Sanayi  vs.  SASA Polyester Sanayi

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.

SASA Polyester Sanayi

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SASA Polyester Sanayi are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, SASA Polyester is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Nuh Cimento and SASA Polyester

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

The idea behind Nuh Cimento Sanayi and SASA Polyester 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 CEOs Directory module to screen CEOs from public companies around the world.