Correlation Between Trabzon Liman and Creditwest Faktoring

Can any of the company-specific risk be diversified away by investing in both Trabzon Liman and Creditwest Faktoring 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 Trabzon Liman and Creditwest Faktoring into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Trabzon Liman Isletmeciligi and Creditwest Faktoring AS, you can compare the effects of market volatilities on Trabzon Liman and Creditwest Faktoring 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 Trabzon Liman with a short position of Creditwest Faktoring. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trabzon Liman and Creditwest Faktoring.

Diversification Opportunities for Trabzon Liman and Creditwest Faktoring

-0.3

Correlation Coefficient

Trabzon Liman  Creditwest Faktoring

Very good diversification

The 3 months correlation between Trabzon and Creditwest is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Trabzon Liman Isletmeciligi and Creditwest Faktoring AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creditwest Faktoring and Trabzon Liman 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 Trabzon Liman Isletmeciligi are associated (or correlated) with Creditwest Faktoring. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creditwest Faktoring has no effect on the direction of Trabzon Liman i.e., Trabzon Liman and Creditwest Faktoring go up and down completely randomly.

Pair Corralation between Trabzon Liman and Creditwest Faktoring

Assuming the 90 days trading horizon Trabzon Liman Isletmeciligi is expected to under-perform the Creditwest Faktoring. But the stock apears to be less risky and, when comparing its historical volatility, Trabzon Liman Isletmeciligi is 1.26 times less risky than Creditwest Faktoring. The stock trades about -0.05 of its potential returns per unit of risk. The Creditwest Faktoring AS is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  608.00  in Creditwest Faktoring AS on December 26, 2024 and sell it today you would earn a total of  63.00  from holding Creditwest Faktoring AS or generate 10.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Trabzon Liman Isletmeciligi  vs.  Creditwest Faktoring AS

Trabzon Liman Isletm

Risk-Adjusted Performance

Very Weak

Over the last 90 days Trabzon Liman Isletmeciligi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Creditwest Faktoring

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Creditwest Faktoring AS are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Creditwest Faktoring demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Trabzon Liman and Creditwest Faktoring

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

The idea behind Trabzon Liman Isletmeciligi and Creditwest Faktoring AS 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.