Correlation Between Cimentas Izmir and Borlease Otomotiv
Can any of the company-specific risk be diversified away by investing in both Cimentas Izmir and Borlease Otomotiv 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 Borlease Otomotiv 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 Borlease Otomotiv AS, you can compare the effects of market volatilities on Cimentas Izmir and Borlease Otomotiv 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 Borlease Otomotiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cimentas Izmir and Borlease Otomotiv.
Diversification Opportunities for Cimentas Izmir and Borlease Otomotiv
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cimentas and Borlease is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Cimentas Izmir Cimento and Borlease Otomotiv AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Borlease Otomotiv 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 Borlease Otomotiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Borlease Otomotiv has no effect on the direction of Cimentas Izmir i.e., Cimentas Izmir and Borlease Otomotiv go up and down completely randomly.
Pair Corralation between Cimentas Izmir and Borlease Otomotiv
Assuming the 90 days trading horizon Cimentas Izmir is expected to generate 1.23 times less return on investment than Borlease Otomotiv. But when comparing it to its historical volatility, Cimentas Izmir Cimento is 1.08 times less risky than Borlease Otomotiv. It trades about 0.31 of its potential returns per unit of risk. Borlease Otomotiv AS is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 4,236 in Borlease Otomotiv AS on August 29, 2024 and sell it today you would earn a total of 799.00 from holding Borlease Otomotiv AS or generate 18.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cimentas Izmir Cimento vs. Borlease Otomotiv AS
Performance |
| Timeline |
| Cimentas Izmir Cimento |
| Borlease Otomotiv |
Cimentas Izmir and Borlease Otomotiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cimentas Izmir and Borlease Otomotiv
The main advantage of trading using opposite Cimentas Izmir and Borlease Otomotiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cimentas Izmir position performs unexpectedly, Borlease Otomotiv 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 Borlease Otomotiv will offset losses from the drop in Borlease Otomotiv's long position.| Cimentas Izmir vs. Qnb Finansbank AS | Cimentas Izmir vs. QNB Finans Finansal | Cimentas Izmir vs. Turkiye Kalkinma Bankasi | Cimentas Izmir vs. Kocaer Celik Sanayi |
| Borlease Otomotiv vs. Turkish Airlines | Borlease Otomotiv vs. Koc Holding AS | Borlease Otomotiv vs. Ford Otomotiv Sanayi | Borlease Otomotiv vs. Turkiye Petrol Rafinerileri |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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