Correlation Between Cuhadaroglu Metal and Tumosan
Can any of the company-specific risk be diversified away by investing in both Cuhadaroglu Metal and Tumosan 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 Tumosan 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 Tumosan Motor ve, you can compare the effects of market volatilities on Cuhadaroglu Metal and Tumosan 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 Tumosan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cuhadaroglu Metal and Tumosan.
Diversification Opportunities for Cuhadaroglu Metal and Tumosan
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cuhadaroglu and Tumosan is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Cuhadaroglu Metal Sanayi and Tumosan Motor ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tumosan Motor ve 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 Tumosan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tumosan Motor ve has no effect on the direction of Cuhadaroglu Metal i.e., Cuhadaroglu Metal and Tumosan go up and down completely randomly.
Pair Corralation between Cuhadaroglu Metal and Tumosan
Assuming the 90 days trading horizon Cuhadaroglu Metal is expected to generate 2.61 times less return on investment than Tumosan. But when comparing it to its historical volatility, Cuhadaroglu Metal Sanayi is 1.19 times less risky than Tumosan. It trades about 0.02 of its potential returns per unit of risk. Tumosan Motor ve is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 8,670 in Tumosan Motor ve on September 12, 2024 and sell it today you would earn a total of 3,070 from holding Tumosan Motor ve or generate 35.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cuhadaroglu Metal Sanayi vs. Tumosan Motor ve
Performance |
| Timeline |
| Cuhadaroglu Metal Sanayi |
| Tumosan Motor ve |
Cuhadaroglu Metal and Tumosan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cuhadaroglu Metal and Tumosan
The main advantage of trading using opposite Cuhadaroglu Metal and Tumosan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cuhadaroglu Metal position performs unexpectedly, Tumosan 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 Tumosan will offset losses from the drop in Tumosan'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 |
| Tumosan vs. Cuhadaroglu Metal Sanayi | Tumosan vs. Akcansa Cimento Sanayi | Tumosan vs. Borlease Otomotiv AS | Tumosan vs. Koza Anadolu Metal |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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