Correlation Between Federal Mogul and Sodas Sodyum
Can any of the company-specific risk be diversified away by investing in both Federal Mogul and Sodas Sodyum 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 Sodas Sodyum 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 Sodas Sodyum Sanayi, you can compare the effects of market volatilities on Federal Mogul and Sodas Sodyum 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 Sodas Sodyum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Mogul and Sodas Sodyum.
Diversification Opportunities for Federal Mogul and Sodas Sodyum
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Federal and Sodas is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Federal Mogul Izmit and Sodas Sodyum Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sodas Sodyum Sanayi 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 Sodas Sodyum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sodas Sodyum Sanayi has no effect on the direction of Federal Mogul i.e., Federal Mogul and Sodas Sodyum go up and down completely randomly.
Pair Corralation between Federal Mogul and Sodas Sodyum
Assuming the 90 days trading horizon Federal Mogul Izmit is expected to generate 0.87 times more return on investment than Sodas Sodyum. However, Federal Mogul Izmit is 1.15 times less risky than Sodas Sodyum. It trades about 0.03 of its potential returns per unit of risk. Sodas Sodyum Sanayi is currently generating about -0.11 per unit of risk. If you would invest 30,325 in Federal Mogul Izmit on September 5, 2024 and sell it today you would earn a total of 225.00 from holding Federal Mogul Izmit or generate 0.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federal Mogul Izmit vs. Sodas Sodyum Sanayi
Performance |
| Timeline |
| Federal Mogul Izmit |
| Sodas Sodyum Sanayi |
Federal Mogul and Sodas Sodyum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Mogul and Sodas Sodyum
The main advantage of trading using opposite Federal Mogul and Sodas Sodyum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Mogul position performs unexpectedly, Sodas Sodyum 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 Sodas Sodyum will offset losses from the drop in Sodas Sodyum's long position.| Federal Mogul vs. Sodas Sodyum Sanayi | Federal Mogul vs. Qnb Finansbank AS | Federal Mogul vs. Turkiye Kalkinma Bankasi | Federal Mogul vs. Politeknik Metal Sanayi |
| Sodas Sodyum vs. Politeknik Metal Sanayi | Sodas Sodyum vs. Mackolik Internet Hizmetleri | Sodas Sodyum vs. Turkiye Kalkinma Bankasi | Sodas Sodyum vs. Gentas Genel Metal |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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