Correlation Between Kardemir Karabuk and Gubre Fabrikalari
Can any of the company-specific risk be diversified away by investing in both Kardemir Karabuk and Gubre Fabrikalari 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 Gubre Fabrikalari 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 Gubre Fabrikalari TAS, you can compare the effects of market volatilities on Kardemir Karabuk and Gubre Fabrikalari 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 Gubre Fabrikalari. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kardemir Karabuk and Gubre Fabrikalari.
Diversification Opportunities for Kardemir Karabuk and Gubre Fabrikalari
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kardemir and Gubre is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Kardemir Karabuk Demir and Gubre Fabrikalari TAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gubre Fabrikalari TAS 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 Gubre Fabrikalari. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gubre Fabrikalari TAS has no effect on the direction of Kardemir Karabuk i.e., Kardemir Karabuk and Gubre Fabrikalari go up and down completely randomly.
Pair Corralation between Kardemir Karabuk and Gubre Fabrikalari
Assuming the 90 days trading horizon Kardemir Karabuk is expected to generate 1.87 times less return on investment than Gubre Fabrikalari. But when comparing it to its historical volatility, Kardemir Karabuk Demir is 1.15 times less risky than Gubre Fabrikalari. It trades about 0.25 of its potential returns per unit of risk. Gubre Fabrikalari TAS is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 20,430 in Gubre Fabrikalari TAS on September 4, 2024 and sell it today you would earn a total of 4,820 from holding Gubre Fabrikalari TAS or generate 23.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kardemir Karabuk Demir vs. Gubre Fabrikalari TAS
Performance |
| Timeline |
| Kardemir Karabuk Demir |
| Gubre Fabrikalari TAS |
Kardemir Karabuk and Gubre Fabrikalari Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kardemir Karabuk and Gubre Fabrikalari
The main advantage of trading using opposite Kardemir Karabuk and Gubre Fabrikalari positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kardemir Karabuk position performs unexpectedly, Gubre Fabrikalari 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 Gubre Fabrikalari will offset losses from the drop in Gubre Fabrikalari's long position.| Kardemir Karabuk vs. MEGA METAL | Kardemir Karabuk vs. Bms Birlesik Metal | Kardemir Karabuk vs. Qnb Finansbank AS | Kardemir Karabuk vs. Mackolik Internet Hizmetleri |
| Gubre Fabrikalari vs. SASA Polyester Sanayi | Gubre Fabrikalari vs. Koza Altin Isletmeleri | Gubre Fabrikalari vs. Kardemir Karabuk Demir | Gubre Fabrikalari vs. Hektas Ticaret TAS |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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