Correlation Between Ege Endustri and ICBC Turkey
Can any of the company-specific risk be diversified away by investing in both Ege Endustri 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 Ege Endustri and ICBC Turkey 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 ICBC Turkey Bank, you can compare the effects of market volatilities on Ege Endustri 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 Ege Endustri with a short position of ICBC Turkey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ege Endustri and ICBC Turkey.
Diversification Opportunities for Ege Endustri and ICBC Turkey
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ege and ICBC is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Ege Endustri ve 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 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 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 Ege Endustri i.e., Ege Endustri and ICBC Turkey go up and down completely randomly.
Pair Corralation between Ege Endustri and ICBC Turkey
Assuming the 90 days trading horizon Ege Endustri ve is expected to generate 1.14 times more return on investment than ICBC Turkey. However, Ege Endustri is 1.14 times more volatile than ICBC Turkey Bank. It trades about 0.07 of its potential returns per unit of risk. ICBC Turkey Bank is currently generating about 0.06 per unit of risk. If you would invest 539,978 in Ege Endustri ve on August 28, 2024 and sell it today you would earn a total of 554,022 from holding Ege Endustri ve or generate 102.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ege Endustri ve vs. ICBC Turkey Bank
Performance |
| Timeline |
| Ege Endustri ve |
| ICBC Turkey Bank |
Ege Endustri and ICBC Turkey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ege Endustri and ICBC Turkey
The main advantage of trading using opposite Ege Endustri and ICBC Turkey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ege Endustri 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.| Ege Endustri vs. Qnb Finansbank AS | Ege Endustri vs. Kent Gida Maddeleri | Ege Endustri vs. QNB Finans Finansal | Ege Endustri vs. Turkiye Kalkinma Bankasi |
| ICBC Turkey vs. Akcansa Cimento Sanayi | ICBC Turkey vs. Akbank TAS | ICBC Turkey vs. Bms Birlesik Metal | ICBC Turkey vs. Trabzonspor Sportif Yatirim |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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