Correlation Between Bursa Cimento and Turk Tuborg

Can any of the company-specific risk be diversified away by investing in both Bursa Cimento and Turk Tuborg 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 Bursa Cimento and Turk Tuborg into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bursa Cimento Fabrikasi and Turk Tuborg Bira, you can compare the effects of market volatilities on Bursa Cimento and Turk Tuborg 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 Bursa Cimento with a short position of Turk Tuborg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bursa Cimento and Turk Tuborg.

Diversification Opportunities for Bursa Cimento and Turk Tuborg

0.8

Correlation Coefficient

Bursa Cimento  Turk Tuborg

Very poor diversification

The 3 months correlation between Bursa and Turk is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Bursa Cimento Fabrikasi and Turk Tuborg Bira in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turk Tuborg Bira and Bursa Cimento 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 Bursa Cimento Fabrikasi are associated (or correlated) with Turk Tuborg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turk Tuborg Bira has no effect on the direction of Bursa Cimento i.e., Bursa Cimento and Turk Tuborg go up and down completely randomly.

Pair Corralation between Bursa Cimento and Turk Tuborg

Assuming the 90 days trading horizon Bursa Cimento is expected to generate 1.27 times less return on investment than Turk Tuborg. But when comparing it to its historical volatility, Bursa Cimento Fabrikasi is 1.32 times less risky than Turk Tuborg. It trades about 0.06 of its potential returns per unit of risk. Turk Tuborg Bira is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  13,300  in Turk Tuborg Bira on September 24, 2024 and sell it today you would earn a total of  1,100  from holding Turk Tuborg Bira or generate 8.27% return on investment over 90 days.

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

Bursa Cimento Fabrikasi  vs.  Turk Tuborg Bira

Bursa Cimento Fabrikasi

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bursa Cimento Fabrikasi are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Bursa Cimento may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Turk Tuborg Bira

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Turk Tuborg Bira are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Turk Tuborg may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Bursa Cimento and Turk Tuborg

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

The idea behind Bursa Cimento Fabrikasi and Turk Tuborg Bira 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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .