Correlation Between Seker Finansal and ICBC Turkey

Can any of the company-specific risk be diversified away by investing in both Seker Finansal 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 Seker Finansal and ICBC Turkey into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Seker Finansal Kiralama and ICBC Turkey Bank, you can compare the effects of market volatilities on Seker Finansal 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 Seker Finansal with a short position of ICBC Turkey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seker Finansal and ICBC Turkey.

Diversification Opportunities for Seker Finansal and ICBC Turkey

0.14

Correlation Coefficient

Seker Finansal  ICBC Turkey

Average diversification

The 3 months correlation between Seker and ICBC is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Seker Finansal Kiralama 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 Seker Finansal 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 Seker Finansal Kiralama 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 Seker Finansal i.e., Seker Finansal and ICBC Turkey go up and down completely randomly.

Pair Corralation between Seker Finansal and ICBC Turkey

Assuming the 90 days trading horizon Seker Finansal Kiralama is expected to under-perform the ICBC Turkey. But the stock apears to be less risky and, when comparing its historical volatility, Seker Finansal Kiralama is 1.28 times less risky than ICBC Turkey. The stock trades about -0.16 of its potential returns per unit of risk. The ICBC Turkey Bank is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,357  in ICBC Turkey Bank on September 3, 2024 and sell it today you would earn a total of  38.00  from holding ICBC Turkey Bank or generate 2.8% return on investment over 90 days.

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

Seker Finansal Kiralama  vs.  ICBC Turkey Bank

Seker Finansal Kiralama

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Seker Finansal Kiralama has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

ICBC Turkey Bank

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ICBC Turkey Bank are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, ICBC Turkey is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Seker Finansal and ICBC Turkey

The main advantage of trading using opposite Seker Finansal and ICBC Turkey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seker Finansal 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.

The idea behind Seker Finansal Kiralama and ICBC Turkey Bank 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.