Correlation Between Koc Holding and Cimentas Izmir
Can any of the company-specific risk be diversified away by investing in both Koc Holding and Cimentas Izmir 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 Koc Holding and Cimentas Izmir into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koc Holding AS and Cimentas Izmir Cimento, you can compare the effects of market volatilities on Koc Holding and Cimentas Izmir 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 Koc Holding with a short position of Cimentas Izmir. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koc Holding and Cimentas Izmir.
Diversification Opportunities for Koc Holding and Cimentas Izmir
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Koc and Cimentas is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Koc Holding AS and Cimentas Izmir Cimento in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cimentas Izmir Cimento and Koc Holding 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 Koc Holding AS are associated (or correlated) with Cimentas Izmir. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cimentas Izmir Cimento has no effect on the direction of Koc Holding i.e., Koc Holding and Cimentas Izmir go up and down completely randomly.
Pair Corralation between Koc Holding and Cimentas Izmir
Assuming the 90 days trading horizon Koc Holding is expected to generate 2.01 times less return on investment than Cimentas Izmir. But when comparing it to its historical volatility, Koc Holding AS is 1.87 times less risky than Cimentas Izmir. It trades about 0.1 of its potential returns per unit of risk. Cimentas Izmir Cimento is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 6,505 in Cimentas Izmir Cimento on August 31, 2024 and sell it today you would earn a total of 34,620 from holding Cimentas Izmir Cimento or generate 532.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koc Holding AS vs. Cimentas Izmir Cimento
Performance |
| Timeline |
| Koc Holding AS |
| Cimentas Izmir Cimento |
Koc Holding and Cimentas Izmir Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koc Holding and Cimentas Izmir
The main advantage of trading using opposite Koc Holding and Cimentas Izmir positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koc Holding position performs unexpectedly, Cimentas Izmir 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 Cimentas Izmir will offset losses from the drop in Cimentas Izmir's long position.| Koc Holding vs. Haci Omer Sabanci | Koc Holding vs. Turkiye Sise ve | Koc Holding vs. Turkiye Petrol Rafinerileri | Koc Holding vs. Turkiye Garanti Bankasi |
| Cimentas Izmir vs. Trend Gayrimenkul Yatirim | Cimentas Izmir vs. Trabzon Liman Isletmeciligi | Cimentas Izmir vs. Halk Gayrimenkul Yatirim | Cimentas Izmir vs. Inveo Yatirim Holding |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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