Correlation Between Cuhadaroglu Metal and ICU Girisim

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Can any of the company-specific risk be diversified away by investing in both Cuhadaroglu Metal and ICU Girisim 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 ICU Girisim 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 ICU Girisim Sermayesi, you can compare the effects of market volatilities on Cuhadaroglu Metal and ICU Girisim 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 ICU Girisim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cuhadaroglu Metal and ICU Girisim.

Diversification Opportunities for Cuhadaroglu Metal and ICU Girisim

0.34
  Correlation Coefficient

Weak diversification

The 3 months correlation between Cuhadaroglu and ICU is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Cuhadaroglu Metal Sanayi and ICU Girisim Sermayesi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICU Girisim Sermayesi 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 ICU Girisim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICU Girisim Sermayesi has no effect on the direction of Cuhadaroglu Metal i.e., Cuhadaroglu Metal and ICU Girisim go up and down completely randomly.

Pair Corralation between Cuhadaroglu Metal and ICU Girisim

Assuming the 90 days trading horizon Cuhadaroglu Metal Sanayi is expected to generate 0.5 times more return on investment than ICU Girisim. However, Cuhadaroglu Metal Sanayi is 1.98 times less risky than ICU Girisim. It trades about -0.17 of its potential returns per unit of risk. ICU Girisim Sermayesi is currently generating about -0.38 per unit of risk. If you would invest  2,590  in Cuhadaroglu Metal Sanayi on December 11, 2024 and sell it today you would lose (442.00) from holding Cuhadaroglu Metal Sanayi or give up 17.07% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy97.67%
ValuesDaily Returns

Cuhadaroglu Metal Sanayi  vs.  ICU Girisim Sermayesi

 Performance 
       Timeline  
Cuhadaroglu Metal Sanayi 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Cuhadaroglu Metal Sanayi are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Cuhadaroglu Metal is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.
ICU Girisim Sermayesi 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days ICU Girisim Sermayesi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Cuhadaroglu Metal and ICU Girisim Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cuhadaroglu Metal and ICU Girisim

The main advantage of trading using opposite Cuhadaroglu Metal and ICU Girisim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cuhadaroglu Metal position performs unexpectedly, ICU Girisim 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 ICU Girisim will offset losses from the drop in ICU Girisim's long position.
The idea behind Cuhadaroglu Metal Sanayi and ICU Girisim Sermayesi pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

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