Correlation Between Vakif Menkul and Bursa Cimento

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

By analyzing existing cross correlation between Vakif Menkul Kiymet and Bursa Cimento Fabrikasi, you can compare the effects of market volatilities on Vakif Menkul and Bursa 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 Vakif Menkul with a short position of Bursa Cimento. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vakif Menkul and Bursa Cimento.

Diversification Opportunities for Vakif Menkul and Bursa Cimento

0.43

Correlation Coefficient

Vakif Menkul  Bursa Cimento

Very weak diversification

The 3 months correlation between Vakif and Bursa is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Vakif Menkul Kiymet and Bursa Cimento Fabrikasi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bursa Cimento Fabrikasi and Vakif Menkul 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 Vakif Menkul Kiymet are associated (or correlated) with Bursa Cimento. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bursa Cimento Fabrikasi has no effect on the direction of Vakif Menkul i.e., Vakif Menkul and Bursa Cimento go up and down completely randomly.

Pair Corralation between Vakif Menkul and Bursa Cimento

Assuming the 90 days trading horizon Vakif Menkul Kiymet is expected to under-perform the Bursa Cimento. But the stock apears to be less risky and, when comparing its historical volatility, Vakif Menkul Kiymet is 1.43 times less risky than Bursa Cimento. The stock trades about -0.38 of its potential returns per unit of risk. The Bursa Cimento Fabrikasi is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  826.00  in Bursa Cimento Fabrikasi on October 12, 2024 and sell it today you would earn a total of  68.00  from holding Bursa Cimento Fabrikasi or generate 8.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Vakif Menkul Kiymet  vs.  Bursa Cimento Fabrikasi

Vakif Menkul Kiymet

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vakif Menkul Kiymet are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Vakif Menkul demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Bursa Cimento Fabrikasi

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bursa Cimento Fabrikasi are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Bursa Cimento demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vakif Menkul and Bursa Cimento

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

The idea behind Vakif Menkul Kiymet and Bursa Cimento Fabrikasi 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.