Correlation Between ICBC Turkey and DO AG
Can any of the company-specific risk be diversified away by investing in both ICBC Turkey and DO AG 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 ICBC Turkey and DO AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICBC Turkey Bank and DO AG, you can compare the effects of market volatilities on ICBC Turkey and DO AG 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 ICBC Turkey with a short position of DO AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICBC Turkey and DO AG.
Diversification Opportunities for ICBC Turkey and DO AG
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ICBC and DOCO is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding ICBC Turkey Bank and DO AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DO AG and ICBC Turkey 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 ICBC Turkey Bank are associated (or correlated) with DO AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DO AG has no effect on the direction of ICBC Turkey i.e., ICBC Turkey and DO AG go up and down completely randomly.
Pair Corralation between ICBC Turkey and DO AG
Assuming the 90 days trading horizon ICBC Turkey is expected to generate 1.97 times less return on investment than DO AG. In addition to that, ICBC Turkey is 1.29 times more volatile than DO AG. It trades about 0.04 of its total potential returns per unit of risk. DO AG is currently generating about 0.11 per unit of volatility. If you would invest 186,443 in DO AG on September 4, 2024 and sell it today you would earn a total of 408,557 from holding DO AG or generate 219.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICBC Turkey Bank vs. DO AG
Performance |
| Timeline |
| ICBC Turkey Bank |
| DO AG |
ICBC Turkey and DO AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICBC Turkey and DO AG
The main advantage of trading using opposite ICBC Turkey and DO AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICBC Turkey position performs unexpectedly, DO AG 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 DO AG will offset losses from the drop in DO AG's long position.| ICBC Turkey vs. Politeknik Metal Sanayi | ICBC Turkey vs. Gentas Genel Metal | ICBC Turkey vs. Trabzonspor Sportif Yatirim | ICBC Turkey vs. Cuhadaroglu Metal Sanayi |
| DO AG vs. Cuhadaroglu Metal Sanayi | DO AG vs. Creditwest Faktoring AS | DO AG vs. E Data Teknoloji Pazarlama | DO AG vs. Sodas Sodyum 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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