Correlation Between Federal Mogul and Turkiye Kalkinma
Can any of the company-specific risk be diversified away by investing in both Federal Mogul and Turkiye Kalkinma 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 Federal Mogul and Turkiye Kalkinma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federal Mogul Izmit and Turkiye Kalkinma Bankasi, you can compare the effects of market volatilities on Federal Mogul and Turkiye Kalkinma 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 Federal Mogul with a short position of Turkiye Kalkinma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Mogul and Turkiye Kalkinma.
Diversification Opportunities for Federal Mogul and Turkiye Kalkinma
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Federal and Turkiye is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Federal Mogul Izmit and Turkiye Kalkinma Bankasi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turkiye Kalkinma Bankasi and Federal Mogul 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 Federal Mogul Izmit are associated (or correlated) with Turkiye Kalkinma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turkiye Kalkinma Bankasi has no effect on the direction of Federal Mogul i.e., Federal Mogul and Turkiye Kalkinma go up and down completely randomly.
Pair Corralation between Federal Mogul and Turkiye Kalkinma
Assuming the 90 days trading horizon Federal Mogul is expected to generate 2.94 times less return on investment than Turkiye Kalkinma. In addition to that, Federal Mogul is 1.1 times more volatile than Turkiye Kalkinma Bankasi. It trades about 0.03 of its total potential returns per unit of risk. Turkiye Kalkinma Bankasi is currently generating about 0.1 per unit of volatility. If you would invest 1,480 in Turkiye Kalkinma Bankasi on September 4, 2024 and sell it today you would earn a total of 45.00 from holding Turkiye Kalkinma Bankasi or generate 3.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federal Mogul Izmit vs. Turkiye Kalkinma Bankasi
Performance |
| Timeline |
| Federal Mogul Izmit |
| Turkiye Kalkinma Bankasi |
Federal Mogul and Turkiye Kalkinma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Mogul and Turkiye Kalkinma
The main advantage of trading using opposite Federal Mogul and Turkiye Kalkinma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Mogul position performs unexpectedly, Turkiye Kalkinma 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 Turkiye Kalkinma will offset losses from the drop in Turkiye Kalkinma's long position.| Federal Mogul vs. Turkiye Kalkinma Bankasi | Federal Mogul vs. Politeknik Metal Sanayi | Federal Mogul vs. Bms Birlesik Metal | Federal Mogul vs. Turkish Airlines |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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