Correlation Between Cemtas Celik and Trabzon Liman

Can any of the company-specific risk be diversified away by investing in both Cemtas Celik and Trabzon Liman 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 Trabzon Liman 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 Trabzon Liman Isletmeciligi, you can compare the effects of market volatilities on Cemtas Celik and Trabzon Liman 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 Trabzon Liman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cemtas Celik and Trabzon Liman.

Diversification Opportunities for Cemtas Celik and Trabzon Liman

0.86

Correlation Coefficient

Cemtas Celik  Trabzon Liman

Very poor diversification

The 3 months correlation between Cemtas and Trabzon is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Cemtas Celik Makina and Trabzon Liman Isletmeciligi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trabzon Liman Isletm 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 Trabzon Liman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trabzon Liman Isletm has no effect on the direction of Cemtas Celik i.e., Cemtas Celik and Trabzon Liman go up and down completely randomly.

Pair Corralation between Cemtas Celik and Trabzon Liman

Assuming the 90 days trading horizon Cemtas Celik Makina is expected to under-perform the Trabzon Liman. But the stock apears to be less risky and, when comparing its historical volatility, Cemtas Celik Makina is 1.54 times less risky than Trabzon Liman. The stock trades about -0.06 of its potential returns per unit of risk. The Trabzon Liman Isletmeciligi is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  9,675  in Trabzon Liman Isletmeciligi on September 23, 2024 and sell it today you would lose (5.00) from holding Trabzon Liman Isletmeciligi or give up 0.05% of portfolio value over 90 days.

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

Cemtas Celik Makina  vs.  Trabzon Liman Isletmeciligi

Cemtas Celik Makina

Risk-Adjusted Performance

0 of 100

Very Weak

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

Trabzon Liman Isletm

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Cemtas Celik and Trabzon Liman

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

The idea behind Cemtas Celik Makina and Trabzon Liman Isletmeciligi 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.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..