Correlation Between Ege Gubre and Cuhadaroglu Metal
Can any of the company-specific risk be diversified away by investing in both Ege Gubre 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 Gubre 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 Gubre Sanayi and Cuhadaroglu Metal Sanayi, you can compare the effects of market volatilities on Ege Gubre 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 Gubre with a short position of Cuhadaroglu Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ege Gubre and Cuhadaroglu Metal.
Diversification Opportunities for Ege Gubre and Cuhadaroglu Metal
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ege and Cuhadaroglu is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Ege Gubre Sanayi 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 Gubre 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 Gubre Sanayi 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 Gubre i.e., Ege Gubre and Cuhadaroglu Metal go up and down completely randomly.
Pair Corralation between Ege Gubre and Cuhadaroglu Metal
Assuming the 90 days trading horizon Ege Gubre Sanayi is expected to generate 1.74 times more return on investment than Cuhadaroglu Metal. However, Ege Gubre is 1.74 times more volatile than Cuhadaroglu Metal Sanayi. It trades about 0.08 of its potential returns per unit of risk. Cuhadaroglu Metal Sanayi is currently generating about -0.04 per unit of risk. If you would invest 4,242 in Ege Gubre Sanayi on September 1, 2024 and sell it today you would earn a total of 1,528 from holding Ege Gubre Sanayi or generate 36.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Ege Gubre Sanayi vs. Cuhadaroglu Metal Sanayi
Performance |
| Timeline |
| Ege Gubre Sanayi |
| Cuhadaroglu Metal Sanayi |
Ege Gubre and Cuhadaroglu Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ege Gubre and Cuhadaroglu Metal
The main advantage of trading using opposite Ege Gubre and Cuhadaroglu Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ege Gubre 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 Gubre vs. Gentas Genel Metal | Ege Gubre vs. Mackolik Internet Hizmetleri | Ege Gubre vs. MEGA METAL | Ege Gubre vs. Cuhadaroglu Metal Sanayi |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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