Correlation Between Cuhadaroglu Metal and IZDEMIR Enerji
Can any of the company-specific risk be diversified away by investing in both Cuhadaroglu Metal and IZDEMIR Enerji 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 IZDEMIR Enerji 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 IZDEMIR Enerji Elektrik, you can compare the effects of market volatilities on Cuhadaroglu Metal and IZDEMIR Enerji 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 IZDEMIR Enerji. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cuhadaroglu Metal and IZDEMIR Enerji.
Diversification Opportunities for Cuhadaroglu Metal and IZDEMIR Enerji
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cuhadaroglu and IZDEMIR is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Cuhadaroglu Metal Sanayi and IZDEMIR Enerji Elektrik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IZDEMIR Enerji Elektrik 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 IZDEMIR Enerji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IZDEMIR Enerji Elektrik has no effect on the direction of Cuhadaroglu Metal i.e., Cuhadaroglu Metal and IZDEMIR Enerji go up and down completely randomly.
Pair Corralation between Cuhadaroglu Metal and IZDEMIR Enerji
Assuming the 90 days trading horizon Cuhadaroglu Metal Sanayi is expected to generate 0.86 times more return on investment than IZDEMIR Enerji. However, Cuhadaroglu Metal Sanayi is 1.17 times less risky than IZDEMIR Enerji. It trades about 0.03 of its potential returns per unit of risk. IZDEMIR Enerji Elektrik is currently generating about 0.02 per unit of risk. If you would invest 1,764 in Cuhadaroglu Metal Sanayi on August 30, 2024 and sell it today you would earn a total of 320.00 from holding Cuhadaroglu Metal Sanayi or generate 18.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 82.61% |
| Values | Daily Returns |
Cuhadaroglu Metal Sanayi vs. IZDEMIR Enerji Elektrik
Performance |
| Timeline |
| Cuhadaroglu Metal Sanayi |
| IZDEMIR Enerji Elektrik |
Cuhadaroglu Metal and IZDEMIR Enerji Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cuhadaroglu Metal and IZDEMIR Enerji
The main advantage of trading using opposite Cuhadaroglu Metal and IZDEMIR Enerji positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cuhadaroglu Metal position performs unexpectedly, IZDEMIR Enerji 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 IZDEMIR Enerji will offset losses from the drop in IZDEMIR Enerji's long position.| Cuhadaroglu Metal vs. Haci Omer Sabanci | Cuhadaroglu Metal vs. Turkiye Petrol Rafinerileri | Cuhadaroglu Metal vs. Turkiye Garanti Bankasi | Cuhadaroglu Metal vs. Akbank TAS |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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