Correlation Between Kardemir Karabuk and Eregli Demir
Can any of the company-specific risk be diversified away by investing in both Kardemir Karabuk and Eregli Demir 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 Kardemir Karabuk and Eregli Demir into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kardemir Karabuk Demir and Eregli Demir ve, you can compare the effects of market volatilities on Kardemir Karabuk and Eregli Demir 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 Kardemir Karabuk with a short position of Eregli Demir. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kardemir Karabuk and Eregli Demir.
Diversification Opportunities for Kardemir Karabuk and Eregli Demir
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kardemir and Eregli is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Kardemir Karabuk Demir and Eregli Demir ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eregli Demir ve and Kardemir Karabuk 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 Kardemir Karabuk Demir are associated (or correlated) with Eregli Demir. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eregli Demir ve has no effect on the direction of Kardemir Karabuk i.e., Kardemir Karabuk and Eregli Demir go up and down completely randomly.
Pair Corralation between Kardemir Karabuk and Eregli Demir
Assuming the 90 days trading horizon Kardemir Karabuk Demir is expected to generate 1.72 times more return on investment than Eregli Demir. However, Kardemir Karabuk is 1.72 times more volatile than Eregli Demir ve. It trades about 0.43 of its potential returns per unit of risk. Eregli Demir ve is currently generating about 0.14 per unit of risk. If you would invest 2,022 in Kardemir Karabuk Demir on August 31, 2024 and sell it today you would earn a total of 696.00 from holding Kardemir Karabuk Demir or generate 34.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Kardemir Karabuk Demir vs. Eregli Demir ve
Performance |
| Timeline |
| Kardemir Karabuk Demir |
| Eregli Demir ve |
Kardemir Karabuk and Eregli Demir Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kardemir Karabuk and Eregli Demir
The main advantage of trading using opposite Kardemir Karabuk and Eregli Demir positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kardemir Karabuk position performs unexpectedly, Eregli Demir 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 Eregli Demir will offset losses from the drop in Eregli Demir's long position.| Kardemir Karabuk vs. Eregli Demir ve | Kardemir Karabuk vs. Iskenderun Demir ve | Kardemir Karabuk vs. Borusan Yatirim ve | Kardemir Karabuk vs. Kardemir Karabuk Demir |
| Eregli Demir vs. Turkiye Sise ve | Eregli Demir vs. Turkiye Petrol Rafinerileri | Eregli Demir vs. Ford Otomotiv Sanayi | Eregli Demir vs. Petkim Petrokimya 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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