Correlation Between Cimentas Izmir and Konya Cimento
Can any of the company-specific risk be diversified away by investing in both Cimentas Izmir and Konya 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 Konya 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 Konya Cimento Sanayi, you can compare the effects of market volatilities on Cimentas Izmir and Konya 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 Konya Cimento. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cimentas Izmir and Konya Cimento.
Diversification Opportunities for Cimentas Izmir and Konya Cimento
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cimentas and Konya is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Cimentas Izmir Cimento and Konya Cimento Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konya 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 Konya Cimento. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konya Cimento Sanayi has no effect on the direction of Cimentas Izmir i.e., Cimentas Izmir and Konya Cimento go up and down completely randomly.
Pair Corralation between Cimentas Izmir and Konya Cimento
Assuming the 90 days trading horizon Cimentas Izmir Cimento is expected to generate 1.09 times more return on investment than Konya Cimento. However, Cimentas Izmir is 1.09 times more volatile than Konya Cimento Sanayi. It trades about 0.19 of its potential returns per unit of risk. Konya Cimento Sanayi is currently generating about 0.05 per unit of risk. If you would invest 38,000 in Cimentas Izmir Cimento on September 1, 2024 and sell it today you would earn a total of 3,700 from holding Cimentas Izmir Cimento or generate 9.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cimentas Izmir Cimento vs. Konya Cimento Sanayi
Performance |
| Timeline |
| Cimentas Izmir Cimento |
| Konya Cimento Sanayi |
Cimentas Izmir and Konya Cimento Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cimentas Izmir and Konya Cimento
The main advantage of trading using opposite Cimentas Izmir and Konya Cimento positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cimentas Izmir position performs unexpectedly, Konya 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 Konya Cimento will offset losses from the drop in Konya Cimento's long position.| Cimentas Izmir vs. Trend Gayrimenkul Yatirim | Cimentas Izmir vs. Trabzon Liman Isletmeciligi | Cimentas Izmir vs. Halk Gayrimenkul Yatirim | Cimentas Izmir vs. Inveo Yatirim Holding |
| Konya Cimento vs. Ege Endustri ve | Konya Cimento vs. Kartonsan Karton Sanayi | Konya Cimento vs. Nuh Cimento Sanayi | Konya Cimento vs. Afyon Cimento Sanayi |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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