Correlation Between Borlease Otomotiv and Cimentas Izmir
Can any of the company-specific risk be diversified away by investing in both Borlease Otomotiv and Cimentas Izmir 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 Borlease Otomotiv and Cimentas Izmir into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Borlease Otomotiv AS and Cimentas Izmir Cimento, you can compare the effects of market volatilities on Borlease Otomotiv and Cimentas Izmir 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 Borlease Otomotiv with a short position of Cimentas Izmir. Check out your portfolio center. Please also check ongoing floating volatility patterns of Borlease Otomotiv and Cimentas Izmir.
Diversification Opportunities for Borlease Otomotiv and Cimentas Izmir
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Borlease and Cimentas is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Borlease Otomotiv AS and Cimentas Izmir Cimento in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cimentas Izmir Cimento and Borlease Otomotiv 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 Borlease Otomotiv AS are associated (or correlated) with Cimentas Izmir. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cimentas Izmir Cimento has no effect on the direction of Borlease Otomotiv i.e., Borlease Otomotiv and Cimentas Izmir go up and down completely randomly.
Pair Corralation between Borlease Otomotiv and Cimentas Izmir
Assuming the 90 days trading horizon Borlease Otomotiv AS is expected to generate 1.09 times more return on investment than Cimentas Izmir. However, Borlease Otomotiv is 1.09 times more volatile than Cimentas Izmir Cimento. It trades about 0.3 of its potential returns per unit of risk. Cimentas Izmir Cimento is currently generating about -0.46 per unit of risk. If you would invest 6,780 in Borlease Otomotiv AS on November 8, 2024 and sell it today you would earn a total of 925.00 from holding Borlease Otomotiv AS or generate 13.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Borlease Otomotiv AS vs. Cimentas Izmir Cimento
Performance |
| Timeline |
| Borlease Otomotiv |
| Cimentas Izmir Cimento |
Borlease Otomotiv and Cimentas Izmir Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Borlease Otomotiv and Cimentas Izmir
The main advantage of trading using opposite Borlease Otomotiv and Cimentas Izmir positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Borlease Otomotiv position performs unexpectedly, Cimentas Izmir 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 Cimentas Izmir will offset losses from the drop in Cimentas Izmir's long position.| Borlease Otomotiv vs. Bms Birlesik Metal | Borlease Otomotiv vs. Gentas Genel Metal | Borlease Otomotiv vs. Galatasaray Sportif Sinai | Borlease Otomotiv vs. Sodas Sodyum Sanayi |
| Cimentas Izmir vs. Bms Birlesik Metal | Cimentas Izmir vs. Gentas Genel Metal | Cimentas Izmir vs. Trabzonspor Sportif Yatirim | Cimentas Izmir vs. Silverline Endustri ve |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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