Correlation Between Cuhadaroglu Metal and Turkiye Kalkinma

Can any of the company-specific risk be diversified away by investing in both Cuhadaroglu Metal and Turkiye Kalkinma 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 Cuhadaroglu Metal and Turkiye Kalkinma into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cuhadaroglu Metal Sanayi and Turkiye Kalkinma Bankasi, you can compare the effects of market volatilities on Cuhadaroglu Metal and Turkiye Kalkinma 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 Cuhadaroglu Metal with a short position of Turkiye Kalkinma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cuhadaroglu Metal and Turkiye Kalkinma.

Diversification Opportunities for Cuhadaroglu Metal and Turkiye Kalkinma

-0.04

Correlation Coefficient

Cuhadaroglu Metal  Turkiye Kalkinma

Good diversification

The 3 months correlation between Cuhadaroglu and Turkiye is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Cuhadaroglu Metal Sanayi and Turkiye Kalkinma Bankasi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turkiye Kalkinma Bankasi and Cuhadaroglu Metal 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 Cuhadaroglu Metal Sanayi are associated (or correlated) with Turkiye Kalkinma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turkiye Kalkinma Bankasi has no effect on the direction of Cuhadaroglu Metal i.e., Cuhadaroglu Metal and Turkiye Kalkinma go up and down completely randomly.

Pair Corralation between Cuhadaroglu Metal and Turkiye Kalkinma

Assuming the 90 days trading horizon Cuhadaroglu Metal Sanayi is expected to under-perform the Turkiye Kalkinma. But the stock apears to be less risky and, when comparing its historical volatility, Cuhadaroglu Metal Sanayi is 1.16 times less risky than Turkiye Kalkinma. The stock trades about -0.05 of its potential returns per unit of risk. The Turkiye Kalkinma Bankasi is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,482  in Turkiye Kalkinma Bankasi on June 30, 2024 and sell it today you would earn a total of  88.00  from holding Turkiye Kalkinma Bankasi or generate 5.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Cuhadaroglu Metal Sanayi  vs.  Turkiye Kalkinma Bankasi

Cuhadaroglu Metal Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cuhadaroglu Metal Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Cuhadaroglu Metal is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Turkiye Kalkinma Bankasi

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Turkiye Kalkinma Bankasi are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Turkiye Kalkinma is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Cuhadaroglu Metal and Turkiye Kalkinma

The main advantage of trading using opposite Cuhadaroglu Metal and Turkiye Kalkinma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cuhadaroglu Metal position performs unexpectedly, Turkiye Kalkinma 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 Turkiye Kalkinma will offset losses from the drop in Turkiye Kalkinma's long position.

The idea behind Cuhadaroglu Metal Sanayi and Turkiye Kalkinma Bankasi pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.