Correlation Between Ipek Dogal and Kardemir Karabuk
Can any of the company-specific risk be diversified away by investing in both Ipek Dogal and Kardemir Karabuk 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 Ipek Dogal and Kardemir Karabuk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ipek Dogal Enerji and Kardemir Karabuk Demir, you can compare the effects of market volatilities on Ipek Dogal and Kardemir Karabuk 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 Ipek Dogal with a short position of Kardemir Karabuk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ipek Dogal and Kardemir Karabuk.
Diversification Opportunities for Ipek Dogal and Kardemir Karabuk
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ipek and Kardemir is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ipek Dogal Enerji and Kardemir Karabuk Demir in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kardemir Karabuk Demir and Ipek Dogal 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 Ipek Dogal Enerji are associated (or correlated) with Kardemir Karabuk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kardemir Karabuk Demir has no effect on the direction of Ipek Dogal i.e., Ipek Dogal and Kardemir Karabuk go up and down completely randomly.
Pair Corralation between Ipek Dogal and Kardemir Karabuk
Assuming the 90 days trading horizon Ipek Dogal Enerji is expected to generate 1.59 times more return on investment than Kardemir Karabuk. However, Ipek Dogal is 1.59 times more volatile than Kardemir Karabuk Demir. It trades about 0.59 of its potential returns per unit of risk. Kardemir Karabuk Demir is currently generating about 0.25 per unit of risk. If you would invest 3,418 in Ipek Dogal Enerji on September 4, 2024 and sell it today you would earn a total of 1,807 from holding Ipek Dogal Enerji or generate 52.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ipek Dogal Enerji vs. Kardemir Karabuk Demir
Performance |
| Timeline |
| Ipek Dogal Enerji |
| Kardemir Karabuk Demir |
Ipek Dogal and Kardemir Karabuk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ipek Dogal and Kardemir Karabuk
The main advantage of trading using opposite Ipek Dogal and Kardemir Karabuk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ipek Dogal position performs unexpectedly, Kardemir Karabuk 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 Kardemir Karabuk will offset losses from the drop in Kardemir Karabuk's long position.| Ipek Dogal vs. Koza Anadolu Metal | Ipek Dogal vs. Koza Altin Isletmeleri | Ipek Dogal vs. Vestel Elektronik Sanayi | Ipek Dogal vs. Petkim Petrokimya Holding |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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