Correlation Between DO AG and ICBC Turkey
Can any of the company-specific risk be diversified away by investing in both DO AG and ICBC Turkey 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 DO AG and ICBC Turkey into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DO AG and ICBC Turkey Bank, you can compare the effects of market volatilities on DO AG and ICBC Turkey 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 DO AG with a short position of ICBC Turkey. Check out your portfolio center. Please also check ongoing floating volatility patterns of DO AG and ICBC Turkey.
Diversification Opportunities for DO AG and ICBC Turkey
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DOCO and ICBC is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding DO AG and ICBC Turkey Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICBC Turkey Bank and DO AG 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 DO AG are associated (or correlated) with ICBC Turkey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICBC Turkey Bank has no effect on the direction of DO AG i.e., DO AG and ICBC Turkey go up and down completely randomly.
Pair Corralation between DO AG and ICBC Turkey
Assuming the 90 days trading horizon DO AG is expected to generate 0.75 times more return on investment than ICBC Turkey. However, DO AG is 1.33 times less risky than ICBC Turkey. It trades about 0.11 of its potential returns per unit of risk. ICBC Turkey Bank is currently generating about 0.04 per unit of risk. If you would invest 182,862 in DO AG on September 4, 2024 and sell it today you would earn a total of 412,138 from holding DO AG or generate 225.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DO AG vs. ICBC Turkey Bank
Performance |
| Timeline |
| DO AG |
| ICBC Turkey Bank |
DO AG and ICBC Turkey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DO AG and ICBC Turkey
The main advantage of trading using opposite DO AG and ICBC Turkey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DO AG position performs unexpectedly, ICBC Turkey 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 ICBC Turkey will offset losses from the drop in ICBC Turkey's long position.| DO AG vs. Cuhadaroglu Metal Sanayi | DO AG vs. Creditwest Faktoring AS | DO AG vs. E Data Teknoloji Pazarlama | DO AG vs. Sodas Sodyum Sanayi |
| ICBC Turkey vs. Politeknik Metal Sanayi | ICBC Turkey vs. Gentas Genel Metal | ICBC Turkey vs. Trabzonspor Sportif Yatirim | ICBC Turkey vs. Cuhadaroglu Metal 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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