Correlation Between Kartonsan Karton and Nuh Cimento

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

By analyzing existing cross correlation between Kartonsan Karton Sanayi and Nuh Cimento Sanayi, you can compare the effects of market volatilities on Kartonsan Karton and Nuh Cimento 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 Kartonsan Karton with a short position of Nuh Cimento. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kartonsan Karton and Nuh Cimento.

Diversification Opportunities for Kartonsan Karton and Nuh Cimento

0.71

Correlation Coefficient

Kartonsan Karton  Nuh Cimento

Poor diversification

The 3 months correlation between Kartonsan and Nuh is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Kartonsan Karton Sanayi and Nuh Cimento Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuh Cimento Sanayi and Kartonsan Karton 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 Kartonsan Karton Sanayi are associated (or correlated) with Nuh Cimento. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuh Cimento Sanayi has no effect on the direction of Kartonsan Karton i.e., Kartonsan Karton and Nuh Cimento go up and down completely randomly.

Pair Corralation between Kartonsan Karton and Nuh Cimento

Assuming the 90 days trading horizon Kartonsan Karton Sanayi is expected to generate 0.62 times more return on investment than Nuh Cimento. However, Kartonsan Karton Sanayi is 1.61 times less risky than Nuh Cimento. It trades about 0.05 of its potential returns per unit of risk. Nuh Cimento Sanayi is currently generating about -0.06 per unit of risk. If you would invest  8,595  in Kartonsan Karton Sanayi on September 23, 2024 and sell it today you would earn a total of  145.00  from holding Kartonsan Karton Sanayi or generate 1.69% return on investment over 90 days.

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

Kartonsan Karton Sanayi  vs.  Nuh Cimento Sanayi

Kartonsan Karton Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

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

Nuh Cimento Sanayi

Risk-Adjusted Performance

4 of 100

Insignificant

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

Pair Trading with Kartonsan Karton and Nuh Cimento

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

The idea behind Kartonsan Karton Sanayi and Nuh Cimento Sanayi 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.