Correlation Between Ege Endustri and Cuhadaroglu Metal
Can any of the company-specific risk be diversified away by investing in both Ege Endustri and Cuhadaroglu Metal 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 Ege Endustri and Cuhadaroglu Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ege Endustri ve and Cuhadaroglu Metal Sanayi, you can compare the effects of market volatilities on Ege Endustri and Cuhadaroglu Metal 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 Ege Endustri with a short position of Cuhadaroglu Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ege Endustri and Cuhadaroglu Metal.
Diversification Opportunities for Ege Endustri and Cuhadaroglu Metal
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ege and Cuhadaroglu is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ege Endustri ve and Cuhadaroglu Metal Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cuhadaroglu Metal Sanayi and Ege Endustri 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 Ege Endustri ve are associated (or correlated) with Cuhadaroglu Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cuhadaroglu Metal Sanayi has no effect on the direction of Ege Endustri i.e., Ege Endustri and Cuhadaroglu Metal go up and down completely randomly.
Pair Corralation between Ege Endustri and Cuhadaroglu Metal
Assuming the 90 days trading horizon Ege Endustri ve is expected to generate 1.36 times more return on investment than Cuhadaroglu Metal. However, Ege Endustri is 1.36 times more volatile than Cuhadaroglu Metal Sanayi. It trades about 0.15 of its potential returns per unit of risk. Cuhadaroglu Metal Sanayi is currently generating about 0.18 per unit of risk. If you would invest 899,250 in Ege Endustri ve on September 13, 2024 and sell it today you would earn a total of 149,000 from holding Ege Endustri ve or generate 16.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ege Endustri ve vs. Cuhadaroglu Metal Sanayi
Performance |
| Timeline |
| Ege Endustri ve |
| Cuhadaroglu Metal Sanayi |
Ege Endustri and Cuhadaroglu Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ege Endustri and Cuhadaroglu Metal
The main advantage of trading using opposite Ege Endustri and Cuhadaroglu Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ege Endustri position performs unexpectedly, Cuhadaroglu Metal 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 Cuhadaroglu Metal will offset losses from the drop in Cuhadaroglu Metal's long position.| Ege Endustri vs. Ford Otomotiv Sanayi | Ege Endustri vs. Tofas Turk Otomobil | Ege Endustri vs. Hektas Ticaret TAS | Ege Endustri vs. Eregli Demir ve |
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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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