Correlation Between Cemtas Celik and Federal Mogul
Can any of the company-specific risk be diversified away by investing in both Cemtas Celik and Federal Mogul 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 Cemtas Celik and Federal Mogul into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cemtas Celik Makina and Federal Mogul Izmit, you can compare the effects of market volatilities on Cemtas Celik and Federal Mogul 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 Cemtas Celik with a short position of Federal Mogul. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cemtas Celik and Federal Mogul.
Diversification Opportunities for Cemtas Celik and Federal Mogul
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cemtas and Federal is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Cemtas Celik Makina and Federal Mogul Izmit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Mogul Izmit and Cemtas Celik 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 Cemtas Celik Makina are associated (or correlated) with Federal Mogul. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Mogul Izmit has no effect on the direction of Cemtas Celik i.e., Cemtas Celik and Federal Mogul go up and down completely randomly.
Pair Corralation between Cemtas Celik and Federal Mogul
Assuming the 90 days trading horizon Cemtas Celik Makina is expected to under-perform the Federal Mogul. But the stock apears to be less risky and, when comparing its historical volatility, Cemtas Celik Makina is 1.52 times less risky than Federal Mogul. The stock trades about -0.06 of its potential returns per unit of risk. The Federal Mogul Izmit is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 34,250 in Federal Mogul Izmit on September 23, 2024 and sell it today you would lose (1,750) from holding Federal Mogul Izmit or give up 5.11% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Cemtas Celik Makina vs. Federal Mogul Izmit
Performance |
Timeline |
Cemtas Celik Makina |
Federal Mogul Izmit |
Cemtas Celik and Federal Mogul Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cemtas Celik and Federal Mogul
The main advantage of trading using opposite Cemtas Celik and Federal Mogul positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cemtas Celik position performs unexpectedly, Federal Mogul 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 Federal Mogul will offset losses from the drop in Federal Mogul's long position.Cemtas Celik vs. Politeknik Metal Sanayi | Cemtas Celik vs. MEGA METAL | Cemtas Celik vs. Mackolik Internet Hizmetleri | Cemtas Celik vs. E Data Teknoloji Pazarlama |
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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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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