Correlation Between Cimentas Izmir and Gentas Genel
Can any of the company-specific risk be diversified away by investing in both Cimentas Izmir and Gentas Genel 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 Gentas Genel 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 Gentas Genel Metal, you can compare the effects of market volatilities on Cimentas Izmir and Gentas Genel 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 Gentas Genel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cimentas Izmir and Gentas Genel.
Diversification Opportunities for Cimentas Izmir and Gentas Genel
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cimentas and Gentas is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Cimentas Izmir Cimento and Gentas Genel Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentas Genel Metal 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 Gentas Genel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentas Genel Metal has no effect on the direction of Cimentas Izmir i.e., Cimentas Izmir and Gentas Genel go up and down completely randomly.
Pair Corralation between Cimentas Izmir and Gentas Genel
Assuming the 90 days trading horizon Cimentas Izmir Cimento is expected to generate 1.9 times more return on investment than Gentas Genel. However, Cimentas Izmir is 1.9 times more volatile than Gentas Genel Metal. It trades about 0.08 of its potential returns per unit of risk. Gentas Genel Metal is currently generating about 0.01 per unit of risk. If you would invest 22,010 in Cimentas Izmir Cimento on September 3, 2024 and sell it today you would earn a total of 19,690 from holding Cimentas Izmir Cimento or generate 89.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cimentas Izmir Cimento vs. Gentas Genel Metal
Performance |
| Timeline |
| Cimentas Izmir Cimento |
| Gentas Genel Metal |
Cimentas Izmir and Gentas Genel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cimentas Izmir and Gentas Genel
The main advantage of trading using opposite Cimentas Izmir and Gentas Genel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cimentas Izmir position performs unexpectedly, Gentas Genel 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 Gentas Genel will offset losses from the drop in Gentas Genel'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 |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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