Correlation Between Kardemir Karabuk and Kocaer Celik
Can any of the company-specific risk be diversified away by investing in both Kardemir Karabuk and Kocaer Celik 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 Kocaer Celik 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 Kocaer Celik Sanayi, you can compare the effects of market volatilities on Kardemir Karabuk and Kocaer Celik 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 Kocaer Celik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kardemir Karabuk and Kocaer Celik.
Diversification Opportunities for Kardemir Karabuk and Kocaer Celik
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kardemir and Kocaer is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Kardemir Karabuk Demir and Kocaer Celik Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kocaer Celik Sanayi 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 Kocaer Celik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kocaer Celik Sanayi has no effect on the direction of Kardemir Karabuk i.e., Kardemir Karabuk and Kocaer Celik go up and down completely randomly.
Pair Corralation between Kardemir Karabuk and Kocaer Celik
Assuming the 90 days trading horizon Kardemir Karabuk is expected to generate 2.13 times less return on investment than Kocaer Celik. But when comparing it to its historical volatility, Kardemir Karabuk Demir is 1.4 times less risky than Kocaer Celik. It trades about 0.04 of its potential returns per unit of risk. Kocaer Celik Sanayi is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 944.00 in Kocaer Celik Sanayi on September 4, 2024 and sell it today you would earn a total of 496.00 from holding Kocaer Celik Sanayi or generate 52.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kardemir Karabuk Demir vs. Kocaer Celik Sanayi
Performance |
| Timeline |
| Kardemir Karabuk Demir |
| Kocaer Celik Sanayi |
Kardemir Karabuk and Kocaer Celik Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kardemir Karabuk and Kocaer Celik
The main advantage of trading using opposite Kardemir Karabuk and Kocaer Celik positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kardemir Karabuk position performs unexpectedly, Kocaer Celik 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 Kocaer Celik will offset losses from the drop in Kocaer Celik'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 |
| Kocaer Celik vs. Eregli Demir ve | Kocaer Celik vs. Iskenderun Demir ve | Kocaer Celik vs. Borusan Yatirim ve | Kocaer Celik vs. Kardemir Karabuk Demir |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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