Correlation Between Trabzon Liman and Gubre Fabrikalari
Can any of the company-specific risk be diversified away by investing in both Trabzon Liman 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 Trabzon Liman and Gubre Fabrikalari 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 Gubre Fabrikalari TAS, you can compare the effects of market volatilities on Trabzon Liman 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 Trabzon Liman with a short position of Gubre Fabrikalari. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trabzon Liman and Gubre Fabrikalari.
Diversification Opportunities for Trabzon Liman and Gubre Fabrikalari
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Trabzon and Gubre is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Trabzon Liman Isletmeciligi 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 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 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 Trabzon Liman i.e., Trabzon Liman and Gubre Fabrikalari go up and down completely randomly.
Pair Corralation between Trabzon Liman and Gubre Fabrikalari
Assuming the 90 days trading horizon Trabzon Liman Isletmeciligi is expected to under-perform the Gubre Fabrikalari. But the stock apears to be less risky and, when comparing its historical volatility, Trabzon Liman Isletmeciligi is 1.04 times less risky than Gubre Fabrikalari. The stock trades about -0.03 of its potential returns per unit of risk. The Gubre Fabrikalari TAS is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 15,450 in Gubre Fabrikalari TAS on September 2, 2024 and sell it today you would earn a total of 9,450 from holding Gubre Fabrikalari TAS or generate 61.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trabzon Liman Isletmeciligi vs. Gubre Fabrikalari TAS
Performance |
| Timeline |
| Trabzon Liman Isletm |
| Gubre Fabrikalari TAS |
Trabzon Liman and Gubre Fabrikalari Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trabzon Liman and Gubre Fabrikalari
The main advantage of trading using opposite Trabzon Liman and Gubre Fabrikalari positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trabzon Liman 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.| 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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