Correlation Between Cimentas Izmir and Afyon Cimento
Can any of the company-specific risk be diversified away by investing in both Cimentas Izmir and Afyon 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 Cimentas Izmir and Afyon Cimento into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cimentas Izmir Cimento and Afyon Cimento Sanayi, you can compare the effects of market volatilities on Cimentas Izmir and Afyon 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 Cimentas Izmir with a short position of Afyon Cimento. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cimentas Izmir and Afyon Cimento.
Diversification Opportunities for Cimentas Izmir and Afyon Cimento
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cimentas and Afyon is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Cimentas Izmir Cimento and Afyon Cimento Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afyon Cimento Sanayi and Cimentas Izmir 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 Cimentas Izmir Cimento are associated (or correlated) with Afyon Cimento. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Afyon Cimento Sanayi has no effect on the direction of Cimentas Izmir i.e., Cimentas Izmir and Afyon Cimento go up and down completely randomly.
Pair Corralation between Cimentas Izmir and Afyon Cimento
Assuming the 90 days trading horizon Cimentas Izmir Cimento is expected to generate 0.88 times more return on investment than Afyon Cimento. However, Cimentas Izmir Cimento is 1.14 times less risky than Afyon Cimento. It trades about 0.29 of its potential returns per unit of risk. Afyon Cimento Sanayi is currently generating about -0.36 per unit of risk. If you would invest 36,650 in Cimentas Izmir Cimento on September 3, 2024 and sell it today you would earn a total of 5,050 from holding Cimentas Izmir Cimento or generate 13.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cimentas Izmir Cimento vs. Afyon Cimento Sanayi
Performance |
| Timeline |
| Cimentas Izmir Cimento |
| Afyon Cimento Sanayi |
Cimentas Izmir and Afyon Cimento Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cimentas Izmir and Afyon Cimento
The main advantage of trading using opposite Cimentas Izmir and Afyon Cimento positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cimentas Izmir position performs unexpectedly, Afyon 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 Afyon Cimento will offset losses from the drop in Afyon Cimento's long position.| Cimentas Izmir vs. Gentas Genel Metal | Cimentas Izmir vs. MEGA METAL | Cimentas Izmir vs. Koza Anadolu Metal | Cimentas Izmir vs. Creditwest Faktoring AS |
| Afyon Cimento vs. Qnb Finansbank AS | Afyon Cimento vs. Turkiye Kalkinma Bankasi | Afyon Cimento vs. Kocaer Celik Sanayi | Afyon Cimento vs. Cimentas Izmir Cimento |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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