Correlation Between Trabzon Liman and Federal Mogul
Can any of the company-specific risk be diversified away by investing in both Trabzon Liman and Federal Mogul 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 Trabzon Liman and Federal Mogul into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trabzon Liman Isletmeciligi and Federal Mogul Izmit, you can compare the effects of market volatilities on Trabzon Liman and Federal Mogul 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 Trabzon Liman with a short position of Federal Mogul. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trabzon Liman and Federal Mogul.
Diversification Opportunities for Trabzon Liman and Federal Mogul
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Trabzon and Federal is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Trabzon Liman Isletmeciligi and Federal Mogul Izmit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Mogul Izmit and Trabzon Liman 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 Trabzon Liman Isletmeciligi are associated (or correlated) with Federal Mogul. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Mogul Izmit has no effect on the direction of Trabzon Liman i.e., Trabzon Liman and Federal Mogul go up and down completely randomly.
Pair Corralation between Trabzon Liman and Federal Mogul
Assuming the 90 days trading horizon Trabzon Liman Isletmeciligi is expected to under-perform the Federal Mogul. But the stock apears to be less risky and, when comparing its historical volatility, Trabzon Liman Isletmeciligi is 1.11 times less risky than Federal Mogul. The stock trades about 0.0 of its potential returns per unit of risk. The Federal Mogul Izmit is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 30,125 in Federal Mogul Izmit on September 2, 2024 and sell it today you would earn a total of 475.00 from holding Federal Mogul Izmit or generate 1.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trabzon Liman Isletmeciligi vs. Federal Mogul Izmit
Performance |
| Timeline |
| Trabzon Liman Isletm |
| Federal Mogul Izmit |
Trabzon Liman and Federal Mogul Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trabzon Liman and Federal Mogul
The main advantage of trading using opposite Trabzon Liman and Federal Mogul positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trabzon Liman position performs unexpectedly, Federal Mogul 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 Federal Mogul will offset losses from the drop in Federal Mogul's long position.| Trabzon Liman vs. Cuhadaroglu Metal Sanayi | Trabzon Liman vs. Mackolik Internet Hizmetleri | Trabzon Liman vs. Bms Birlesik Metal | Trabzon Liman vs. Gentas Genel Metal |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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