Correlation Between GM and Turkiye Sise
Can any of the company-specific risk be diversified away by investing in both GM and Turkiye Sise 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 GM and Turkiye Sise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Turkiye Sise ve, you can compare the effects of market volatilities on GM and Turkiye Sise 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 GM with a short position of Turkiye Sise. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Turkiye Sise.
Diversification Opportunities for GM and Turkiye Sise
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between GM and Turkiye is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Turkiye Sise ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turkiye Sise ve and GM 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 General Motors are associated (or correlated) with Turkiye Sise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turkiye Sise ve has no effect on the direction of GM i.e., GM and Turkiye Sise go up and down completely randomly.
Pair Corralation between GM and Turkiye Sise
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.84 times more return on investment than Turkiye Sise. However, General Motors is 1.19 times less risky than Turkiye Sise. It trades about 0.06 of its potential returns per unit of risk. Turkiye Sise ve is currently generating about 0.01 per unit of risk. If you would invest 3,525 in General Motors on August 31, 2024 and sell it today you would earn a total of 2,034 from holding General Motors or generate 57.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.37% |
| Values | Daily Returns |
General Motors vs. Turkiye Sise ve
Performance |
| Timeline |
| General Motors |
| Turkiye Sise ve |
GM and Turkiye Sise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Turkiye Sise
The main advantage of trading using opposite GM and Turkiye Sise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Turkiye Sise 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 Sise will offset losses from the drop in Turkiye Sise's long position.The idea behind General Motors and Turkiye Sise ve pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Turkiye Sise vs. Eregli Demir ve | Turkiye Sise vs. Turkiye Petrol Rafinerileri | Turkiye Sise vs. Turkish Airlines | Turkiye Sise vs. Ford Otomotiv Sanayi |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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