Correlation Between Cuhadaroglu Metal and Anadolu Efes

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Can any of the company-specific risk be diversified away by investing in both Cuhadaroglu Metal and Anadolu Efes 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 Cuhadaroglu Metal and Anadolu Efes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cuhadaroglu Metal Sanayi and Anadolu Efes Biracilik, you can compare the effects of market volatilities on Cuhadaroglu Metal and Anadolu Efes 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 Cuhadaroglu Metal with a short position of Anadolu Efes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cuhadaroglu Metal and Anadolu Efes.

Diversification Opportunities for Cuhadaroglu Metal and Anadolu Efes

0.68
  Correlation Coefficient

Poor diversification

The 3 months correlation between Cuhadaroglu and Anadolu is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Cuhadaroglu Metal Sanayi and Anadolu Efes Biracilik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anadolu Efes Biracilik and Cuhadaroglu Metal 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 Cuhadaroglu Metal Sanayi are associated (or correlated) with Anadolu Efes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anadolu Efes Biracilik has no effect on the direction of Cuhadaroglu Metal i.e., Cuhadaroglu Metal and Anadolu Efes go up and down completely randomly.

Pair Corralation between Cuhadaroglu Metal and Anadolu Efes

Assuming the 90 days trading horizon Cuhadaroglu Metal Sanayi is expected to under-perform the Anadolu Efes. In addition to that, Cuhadaroglu Metal is 1.51 times more volatile than Anadolu Efes Biracilik. It trades about -0.17 of its total potential returns per unit of risk. Anadolu Efes Biracilik is currently generating about -0.02 per unit of volatility. If you would invest  15,180  in Anadolu Efes Biracilik on December 29, 2023 and sell it today you would lose (410.00) from holding Anadolu Efes Biracilik or give up 2.7% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy95.65%
ValuesDaily Returns

Cuhadaroglu Metal Sanayi  vs.  Anadolu Efes Biracilik

 Performance 
       Timeline  
Cuhadaroglu Metal Sanayi 

Risk-Adjusted Performance

8 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Cuhadaroglu Metal Sanayi are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Cuhadaroglu Metal demonstrated solid returns over the last few months and may actually be approaching a breakup point.
Anadolu Efes Biracilik 

Risk-Adjusted Performance

4 of 100

 
Low
 
High
Very Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Anadolu Efes Biracilik are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Anadolu Efes may actually be approaching a critical reversion point that can send shares even higher in April 2024.

Cuhadaroglu Metal and Anadolu Efes Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cuhadaroglu Metal and Anadolu Efes

The main advantage of trading using opposite Cuhadaroglu Metal and Anadolu Efes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cuhadaroglu Metal position performs unexpectedly, Anadolu Efes 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 Anadolu Efes will offset losses from the drop in Anadolu Efes' long position.
The idea behind Cuhadaroglu Metal Sanayi and Anadolu Efes Biracilik 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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