Correlation Between ICBC Turkey and Temapol Polimer
Can any of the company-specific risk be diversified away by investing in both ICBC Turkey and Temapol Polimer 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 Temapol Polimer 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 Temapol Polimer Plastik, you can compare the effects of market volatilities on ICBC Turkey and Temapol Polimer 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 Temapol Polimer. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICBC Turkey and Temapol Polimer.
Diversification Opportunities for ICBC Turkey and Temapol Polimer
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ICBC and Temapol is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding ICBC Turkey Bank and Temapol Polimer Plastik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Temapol Polimer Plastik 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 Temapol Polimer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Temapol Polimer Plastik has no effect on the direction of ICBC Turkey i.e., ICBC Turkey and Temapol Polimer go up and down completely randomly.
Pair Corralation between ICBC Turkey and Temapol Polimer
Assuming the 90 days trading horizon ICBC Turkey is expected to generate 2.03 times less return on investment than Temapol Polimer. In addition to that, ICBC Turkey is 1.39 times more volatile than Temapol Polimer Plastik. It trades about 0.06 of its total potential returns per unit of risk. Temapol Polimer Plastik is currently generating about 0.16 per unit of volatility. If you would invest 6,715 in Temapol Polimer Plastik on September 13, 2024 and sell it today you would earn a total of 485.00 from holding Temapol Polimer Plastik or generate 7.22% 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. Temapol Polimer Plastik
Performance |
| Timeline |
| ICBC Turkey Bank |
| Temapol Polimer Plastik |
ICBC Turkey and Temapol Polimer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICBC Turkey and Temapol Polimer
The main advantage of trading using opposite ICBC Turkey and Temapol Polimer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICBC Turkey position performs unexpectedly, Temapol Polimer 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 Temapol Polimer will offset losses from the drop in Temapol Polimer's long position.| ICBC Turkey vs. Gentas Genel Metal | ICBC Turkey vs. Borlease Otomotiv AS | ICBC Turkey vs. Creditwest Faktoring AS | ICBC Turkey vs. Mackolik Internet Hizmetleri |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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