Correlation Between Kardemir Karabuk and Tekfen Holding
Can any of the company-specific risk be diversified away by investing in both Kardemir Karabuk and Tekfen Holding 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 Tekfen Holding 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 Tekfen Holding AS, you can compare the effects of market volatilities on Kardemir Karabuk and Tekfen Holding 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 Tekfen Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kardemir Karabuk and Tekfen Holding.
Diversification Opportunities for Kardemir Karabuk and Tekfen Holding
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kardemir and Tekfen is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Kardemir Karabuk Demir and Tekfen Holding AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tekfen Holding AS 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 Tekfen Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tekfen Holding AS has no effect on the direction of Kardemir Karabuk i.e., Kardemir Karabuk and Tekfen Holding go up and down completely randomly.
Pair Corralation between Kardemir Karabuk and Tekfen Holding
Assuming the 90 days trading horizon Kardemir Karabuk Demir is expected to generate 0.93 times more return on investment than Tekfen Holding. However, Kardemir Karabuk Demir is 1.07 times less risky than Tekfen Holding. It trades about 0.24 of its potential returns per unit of risk. Tekfen Holding AS is currently generating about 0.09 per unit of risk. If you would invest 2,452 in Kardemir Karabuk Demir on August 28, 2024 and sell it today you would earn a total of 288.00 from holding Kardemir Karabuk Demir or generate 11.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kardemir Karabuk Demir vs. Tekfen Holding AS
Performance |
| Timeline |
| Kardemir Karabuk Demir |
| Tekfen Holding AS |
Kardemir Karabuk and Tekfen Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kardemir Karabuk and Tekfen Holding
The main advantage of trading using opposite Kardemir Karabuk and Tekfen Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kardemir Karabuk position performs unexpectedly, Tekfen Holding 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 Tekfen Holding will offset losses from the drop in Tekfen Holding's long position.| Kardemir Karabuk vs. Sodas Sodyum Sanayi | Kardemir Karabuk vs. Bms Birlesik Metal | Kardemir Karabuk vs. ICBC Turkey Bank | Kardemir Karabuk vs. Gentas Genel Metal |
| Tekfen Holding vs. QNB Finans Finansal | Tekfen Holding vs. Pamel Yenilenebilir Elektrik | Tekfen Holding vs. Brisa Bridgestone Sabanci | Tekfen Holding vs. Dogus Gayrimenkul Yatirim |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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