Correlation Between ENKA Insaat and Cimsa Cimento
Can any of the company-specific risk be diversified away by investing in both ENKA Insaat and Cimsa Cimento 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 ENKA Insaat and Cimsa Cimento into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENKA Insaat ve and Cimsa Cimento Sanayi, you can compare the effects of market volatilities on ENKA Insaat and Cimsa Cimento 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 ENKA Insaat with a short position of Cimsa Cimento. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENKA Insaat and Cimsa Cimento.
Diversification Opportunities for ENKA Insaat and Cimsa Cimento
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ENKA and Cimsa is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding ENKA Insaat ve and Cimsa Cimento Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cimsa Cimento Sanayi and ENKA Insaat 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 ENKA Insaat ve are associated (or correlated) with Cimsa Cimento. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cimsa Cimento Sanayi has no effect on the direction of ENKA Insaat i.e., ENKA Insaat and Cimsa Cimento go up and down completely randomly.
Pair Corralation between ENKA Insaat and Cimsa Cimento
Assuming the 90 days trading horizon ENKA Insaat is expected to generate 6.18 times less return on investment than Cimsa Cimento. But when comparing it to its historical volatility, ENKA Insaat ve is 9.48 times less risky than Cimsa Cimento. It trades about 0.08 of its potential returns per unit of risk. Cimsa Cimento Sanayi is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,183 in Cimsa Cimento Sanayi on August 29, 2024 and sell it today you would earn a total of 2,877 from holding Cimsa Cimento Sanayi or generate 243.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.19% |
| Values | Daily Returns |
ENKA Insaat ve vs. Cimsa Cimento Sanayi
Performance |
| Timeline |
| ENKA Insaat ve |
| Cimsa Cimento Sanayi |
ENKA Insaat and Cimsa Cimento Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENKA Insaat and Cimsa Cimento
The main advantage of trading using opposite ENKA Insaat and Cimsa Cimento positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENKA Insaat position performs unexpectedly, Cimsa Cimento 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 Cimsa Cimento will offset losses from the drop in Cimsa Cimento's long position.| ENKA Insaat vs. Turkiye Sise ve | ENKA Insaat vs. Eregli Demir ve | ENKA Insaat vs. Koc Holding AS | ENKA Insaat vs. Haci Omer Sabanci |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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