Correlation Between Eregli Demir and Kardemir Karabuk
Can any of the company-specific risk be diversified away by investing in both Eregli Demir and Kardemir Karabuk 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 Eregli Demir and Kardemir Karabuk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eregli Demir ve and Kardemir Karabuk Demir, you can compare the effects of market volatilities on Eregli Demir and Kardemir Karabuk 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 Eregli Demir with a short position of Kardemir Karabuk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eregli Demir and Kardemir Karabuk.
Diversification Opportunities for Eregli Demir and Kardemir Karabuk
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Eregli and Kardemir is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Eregli Demir ve and Kardemir Karabuk Demir in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kardemir Karabuk Demir and Eregli Demir 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 Eregli Demir ve are associated (or correlated) with Kardemir Karabuk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kardemir Karabuk Demir has no effect on the direction of Eregli Demir i.e., Eregli Demir and Kardemir Karabuk go up and down completely randomly.
Pair Corralation between Eregli Demir and Kardemir Karabuk
Assuming the 90 days trading horizon Eregli Demir is expected to generate 5.07 times less return on investment than Kardemir Karabuk. But when comparing it to its historical volatility, Eregli Demir ve is 1.84 times less risky than Kardemir Karabuk. It trades about 0.17 of its potential returns per unit of risk. Kardemir Karabuk Demir is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 1,975 in Kardemir Karabuk Demir on August 27, 2024 and sell it today you would earn a total of 681.00 from holding Kardemir Karabuk Demir or generate 34.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eregli Demir ve vs. Kardemir Karabuk Demir
Performance |
| Timeline |
| Eregli Demir ve |
| Kardemir Karabuk Demir |
Eregli Demir and Kardemir Karabuk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eregli Demir and Kardemir Karabuk
The main advantage of trading using opposite Eregli Demir and Kardemir Karabuk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eregli Demir position performs unexpectedly, Kardemir Karabuk 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 Kardemir Karabuk will offset losses from the drop in Kardemir Karabuk's long position.| Eregli Demir vs. Qnb Finansbank AS | Eregli Demir vs. QNB Finans Finansal | Eregli Demir vs. Turkiye Kalkinma Bankasi | Eregli Demir vs. Kocaer Celik Sanayi |
| Kardemir Karabuk vs. Eregli Demir ve | Kardemir Karabuk vs. Iskenderun Demir ve | Kardemir Karabuk vs. Borusan Yatirim ve | Kardemir Karabuk vs. Kardemir Karabuk Demir |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |