Correlation Between Gentas Genel and Federal Mogul
Can any of the company-specific risk be diversified away by investing in both Gentas Genel and Federal Mogul 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 Gentas Genel and Federal Mogul into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gentas Genel Metal and Federal Mogul Izmit, you can compare the effects of market volatilities on Gentas Genel and Federal Mogul 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 Gentas Genel with a short position of Federal Mogul. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gentas Genel and Federal Mogul.
Diversification Opportunities for Gentas Genel and Federal Mogul
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gentas and Federal is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Gentas Genel Metal and Federal Mogul Izmit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Mogul Izmit and Gentas Genel 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 Gentas Genel Metal are associated (or correlated) with Federal Mogul. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Mogul Izmit has no effect on the direction of Gentas Genel i.e., Gentas Genel and Federal Mogul go up and down completely randomly.
Pair Corralation between Gentas Genel and Federal Mogul
Assuming the 90 days trading horizon Gentas Genel Metal is expected to generate 1.28 times more return on investment than Federal Mogul. However, Gentas Genel is 1.28 times more volatile than Federal Mogul Izmit. It trades about 0.2 of its potential returns per unit of risk. Federal Mogul Izmit is currently generating about -0.01 per unit of risk. If you would invest 769.00 in Gentas Genel Metal on August 31, 2024 and sell it today you would earn a total of 71.00 from holding Gentas Genel Metal or generate 9.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gentas Genel Metal vs. Federal Mogul Izmit
Performance |
| Timeline |
| Gentas Genel Metal |
| Federal Mogul Izmit |
Gentas Genel and Federal Mogul Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gentas Genel and Federal Mogul
The main advantage of trading using opposite Gentas Genel and Federal Mogul positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gentas Genel position performs unexpectedly, Federal Mogul 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 Federal Mogul will offset losses from the drop in Federal Mogul's long position.| Gentas Genel vs. Aselsan Elektronik Sanayi | Gentas Genel vs. Turkiye Petrol Rafinerileri | Gentas Genel vs. Pegasus Hava Tasimaciligi | Gentas Genel vs. Turkiye Sise ve |
| Federal Mogul vs. Gentas Genel Metal | Federal Mogul vs. Koza Anadolu Metal | Federal Mogul vs. Sodas Sodyum Sanayi | Federal Mogul vs. Trabzonspor Sportif Yatirim |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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