Correlation Between ICBC Turkey and Gentas Genel
Can any of the company-specific risk be diversified away by investing in both ICBC Turkey and Gentas Genel 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 Gentas Genel 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 Gentas Genel Metal, you can compare the effects of market volatilities on ICBC Turkey and Gentas Genel 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 Gentas Genel. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICBC Turkey and Gentas Genel.
Diversification Opportunities for ICBC Turkey and Gentas Genel
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ICBC and Gentas is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding ICBC Turkey Bank and Gentas Genel Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentas Genel Metal 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 Gentas Genel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentas Genel Metal has no effect on the direction of ICBC Turkey i.e., ICBC Turkey and Gentas Genel go up and down completely randomly.
Pair Corralation between ICBC Turkey and Gentas Genel
Assuming the 90 days trading horizon ICBC Turkey is expected to generate 1.09 times less return on investment than Gentas Genel. In addition to that, ICBC Turkey is 1.08 times more volatile than Gentas Genel Metal. It trades about 0.07 of its total potential returns per unit of risk. Gentas Genel Metal is currently generating about 0.08 per unit of volatility. If you would invest 429.00 in Gentas Genel Metal on August 31, 2024 and sell it today you would earn a total of 446.00 from holding Gentas Genel Metal or generate 103.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICBC Turkey Bank vs. Gentas Genel Metal
Performance |
| Timeline |
| ICBC Turkey Bank |
| Gentas Genel Metal |
ICBC Turkey and Gentas Genel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICBC Turkey and Gentas Genel
The main advantage of trading using opposite ICBC Turkey and Gentas Genel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICBC Turkey position performs unexpectedly, Gentas Genel 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 Gentas Genel will offset losses from the drop in Gentas Genel's long position.The idea behind ICBC Turkey Bank and Gentas Genel Metal 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.| Gentas Genel vs. Aselsan Elektronik Sanayi | Gentas Genel vs. Turkiye Petrol Rafinerileri | Gentas Genel vs. Turkiye Sise ve | Gentas Genel vs. Eregli Demir ve |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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