Correlation Between Tumosan and Cuhadaroglu Metal
Can any of the company-specific risk be diversified away by investing in both Tumosan and Cuhadaroglu Metal 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 Tumosan and Cuhadaroglu Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tumosan Motor ve and Cuhadaroglu Metal Sanayi, you can compare the effects of market volatilities on Tumosan and Cuhadaroglu Metal 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 Tumosan with a short position of Cuhadaroglu Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tumosan and Cuhadaroglu Metal.
Diversification Opportunities for Tumosan and Cuhadaroglu Metal
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tumosan and Cuhadaroglu is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Tumosan Motor ve and Cuhadaroglu Metal Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cuhadaroglu Metal Sanayi and Tumosan 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 Tumosan Motor ve are associated (or correlated) with Cuhadaroglu Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cuhadaroglu Metal Sanayi has no effect on the direction of Tumosan i.e., Tumosan and Cuhadaroglu Metal go up and down completely randomly.
Pair Corralation between Tumosan and Cuhadaroglu Metal
Assuming the 90 days trading horizon Tumosan is expected to generate 1.37 times less return on investment than Cuhadaroglu Metal. In addition to that, Tumosan is 1.28 times more volatile than Cuhadaroglu Metal Sanayi. It trades about 0.06 of its total potential returns per unit of risk. Cuhadaroglu Metal Sanayi is currently generating about 0.1 per unit of volatility. If you would invest 2,012 in Cuhadaroglu Metal Sanayi on September 13, 2024 and sell it today you would earn a total of 68.00 from holding Cuhadaroglu Metal Sanayi or generate 3.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tumosan Motor ve vs. Cuhadaroglu Metal Sanayi
Performance |
| Timeline |
| Tumosan Motor ve |
| Cuhadaroglu Metal Sanayi |
Tumosan and Cuhadaroglu Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tumosan and Cuhadaroglu Metal
The main advantage of trading using opposite Tumosan and Cuhadaroglu Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tumosan position performs unexpectedly, Cuhadaroglu Metal 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 Cuhadaroglu Metal will offset losses from the drop in Cuhadaroglu Metal's long position.| Tumosan vs. Politeknik Metal Sanayi | Tumosan vs. Koza Anadolu Metal | Tumosan vs. MEGA METAL | Tumosan vs. Cuhadaroglu Metal Sanayi |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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