Correlation Between Cuhadaroglu Metal and GSD Holding
Can any of the company-specific risk be diversified away by investing in both Cuhadaroglu Metal and GSD Holding 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 Cuhadaroglu Metal and GSD Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cuhadaroglu Metal Sanayi and GSD Holding AS, you can compare the effects of market volatilities on Cuhadaroglu Metal and GSD Holding 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 Cuhadaroglu Metal with a short position of GSD Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cuhadaroglu Metal and GSD Holding.
Diversification Opportunities for Cuhadaroglu Metal and GSD Holding
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cuhadaroglu and GSD is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Cuhadaroglu Metal Sanayi and GSD Holding AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GSD Holding AS and Cuhadaroglu Metal 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 Cuhadaroglu Metal Sanayi are associated (or correlated) with GSD Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GSD Holding AS has no effect on the direction of Cuhadaroglu Metal i.e., Cuhadaroglu Metal and GSD Holding go up and down completely randomly.
Pair Corralation between Cuhadaroglu Metal and GSD Holding
Assuming the 90 days trading horizon Cuhadaroglu Metal Sanayi is expected to generate 1.32 times more return on investment than GSD Holding. However, Cuhadaroglu Metal is 1.32 times more volatile than GSD Holding AS. It trades about 0.02 of its potential returns per unit of risk. GSD Holding AS is currently generating about -0.02 per unit of risk. If you would invest 2,028 in Cuhadaroglu Metal Sanayi on September 12, 2024 and sell it today you would earn a total of 76.00 from holding Cuhadaroglu Metal Sanayi or generate 3.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.7% |
| Values | Daily Returns |
Cuhadaroglu Metal Sanayi vs. GSD Holding AS
Performance |
| Timeline |
| Cuhadaroglu Metal Sanayi |
| GSD Holding AS |
Cuhadaroglu Metal and GSD Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cuhadaroglu Metal and GSD Holding
The main advantage of trading using opposite Cuhadaroglu Metal and GSD Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cuhadaroglu Metal position performs unexpectedly, GSD Holding 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 GSD Holding will offset losses from the drop in GSD Holding's long position.| Cuhadaroglu Metal vs. Ege Endustri ve | Cuhadaroglu Metal vs. Turkiye Petrol Rafinerileri | Cuhadaroglu Metal vs. Turkiye Garanti Bankasi | Cuhadaroglu Metal vs. Turkish Airlines |
| GSD Holding vs. Pamel Yenilenebilir Elektrik | GSD Holding vs. Bosch Fren Sistemleri | GSD Holding vs. Marka Yatirim Holding | GSD Holding vs. Dogus Gayrimenkul Yatirim |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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