Correlation Between Sodas Sodyum and ICBC Turkey
Can any of the company-specific risk be diversified away by investing in both Sodas Sodyum and ICBC Turkey 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 Sodas Sodyum and ICBC Turkey into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sodas Sodyum Sanayi and ICBC Turkey Bank, you can compare the effects of market volatilities on Sodas Sodyum and ICBC Turkey 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 Sodas Sodyum with a short position of ICBC Turkey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sodas Sodyum and ICBC Turkey.
Diversification Opportunities for Sodas Sodyum and ICBC Turkey
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sodas and ICBC is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Sodas Sodyum Sanayi and ICBC Turkey Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICBC Turkey Bank and Sodas Sodyum 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 Sodas Sodyum Sanayi are associated (or correlated) with ICBC Turkey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICBC Turkey Bank has no effect on the direction of Sodas Sodyum i.e., Sodas Sodyum and ICBC Turkey go up and down completely randomly.
Pair Corralation between Sodas Sodyum and ICBC Turkey
Assuming the 90 days trading horizon Sodas Sodyum Sanayi is expected to under-perform the ICBC Turkey. In addition to that, Sodas Sodyum is 1.5 times more volatile than ICBC Turkey Bank. It trades about -0.08 of its total potential returns per unit of risk. ICBC Turkey Bank is currently generating about -0.04 per unit of volatility. If you would invest 1,633 in ICBC Turkey Bank on November 7, 2024 and sell it today you would lose (306.00) from holding ICBC Turkey Bank or give up 18.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sodas Sodyum Sanayi vs. ICBC Turkey Bank
Performance |
| Timeline |
| Sodas Sodyum Sanayi |
| ICBC Turkey Bank |
Sodas Sodyum and ICBC Turkey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sodas Sodyum and ICBC Turkey
The main advantage of trading using opposite Sodas Sodyum and ICBC Turkey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sodas Sodyum position performs unexpectedly, ICBC Turkey 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 ICBC Turkey will offset losses from the drop in ICBC Turkey's long position.| Sodas Sodyum vs. Bms Birlesik Metal | Sodas Sodyum vs. Koza Anadolu Metal | Sodas Sodyum vs. Qnb Finansbank AS | Sodas Sodyum vs. ICBC Turkey Bank |
| ICBC Turkey vs. Koza Anadolu Metal | ICBC Turkey vs. Bms Birlesik Metal | ICBC Turkey vs. Datagate Bilgisayar Malzemeleri | ICBC Turkey vs. Trabzonspor Sportif 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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