Correlation Between Cimentas Izmir and Eregli Demir
Can any of the company-specific risk be diversified away by investing in both Cimentas Izmir and Eregli Demir 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 Eregli Demir 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 Eregli Demir ve, you can compare the effects of market volatilities on Cimentas Izmir and Eregli Demir 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 Eregli Demir. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cimentas Izmir and Eregli Demir.
Diversification Opportunities for Cimentas Izmir and Eregli Demir
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cimentas and Eregli is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Cimentas Izmir Cimento and Eregli Demir ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eregli Demir ve 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 Eregli Demir. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eregli Demir ve has no effect on the direction of Cimentas Izmir i.e., Cimentas Izmir and Eregli Demir go up and down completely randomly.
Pair Corralation between Cimentas Izmir and Eregli Demir
Assuming the 90 days trading horizon Cimentas Izmir Cimento is expected to under-perform the Eregli Demir. In addition to that, Cimentas Izmir is 1.87 times more volatile than Eregli Demir ve. It trades about -0.01 of its total potential returns per unit of risk. Eregli Demir ve is currently generating about 0.06 per unit of volatility. If you would invest 2,198 in Eregli Demir ve on September 3, 2024 and sell it today you would earn a total of 380.00 from holding Eregli Demir ve or generate 17.29% 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. Eregli Demir ve
Performance |
| Timeline |
| Cimentas Izmir Cimento |
| Eregli Demir ve |
Cimentas Izmir and Eregli Demir Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cimentas Izmir and Eregli Demir
The main advantage of trading using opposite Cimentas Izmir and Eregli Demir positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cimentas Izmir position performs unexpectedly, Eregli Demir 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 Eregli Demir will offset losses from the drop in Eregli Demir'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 |
| Eregli Demir vs. Qnb Finansbank AS | Eregli Demir vs. Turkiye Kalkinma Bankasi | Eregli Demir vs. Kocaer Celik Sanayi | Eregli Demir 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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