Correlation Between Cimentas Izmir and Kocaer Celik
Can any of the company-specific risk be diversified away by investing in both Cimentas Izmir and Kocaer Celik 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 Kocaer Celik 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 Kocaer Celik Sanayi, you can compare the effects of market volatilities on Cimentas Izmir and Kocaer Celik 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 Kocaer Celik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cimentas Izmir and Kocaer Celik.
Diversification Opportunities for Cimentas Izmir and Kocaer Celik
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cimentas and Kocaer is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Cimentas Izmir Cimento and Kocaer Celik Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kocaer Celik 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 Kocaer Celik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kocaer Celik Sanayi has no effect on the direction of Cimentas Izmir i.e., Cimentas Izmir and Kocaer Celik go up and down completely randomly.
Pair Corralation between Cimentas Izmir and Kocaer Celik
Assuming the 90 days trading horizon Cimentas Izmir Cimento is expected to generate 1.02 times more return on investment than Kocaer Celik. However, Cimentas Izmir is 1.02 times more volatile than Kocaer Celik Sanayi. It trades about 0.31 of its potential returns per unit of risk. Kocaer Celik Sanayi is currently generating about 0.21 per unit of risk. If you would invest 37,325 in Cimentas Izmir Cimento on August 28, 2024 and sell it today you would earn a total of 5,650 from holding Cimentas Izmir Cimento or generate 15.14% 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. Kocaer Celik Sanayi
Performance |
| Timeline |
| Cimentas Izmir Cimento |
| Kocaer Celik Sanayi |
Cimentas Izmir and Kocaer Celik Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cimentas Izmir and Kocaer Celik
The main advantage of trading using opposite Cimentas Izmir and Kocaer Celik positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cimentas Izmir position performs unexpectedly, Kocaer Celik 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 Kocaer Celik will offset losses from the drop in Kocaer Celik'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 |
| Kocaer Celik vs. Eregli Demir ve | Kocaer Celik vs. Iskenderun Demir ve | Kocaer Celik vs. Borusan Yatirim ve | Kocaer Celik vs. Kardemir Karabuk Demir |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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