Correlation Between Kartonsan Karton and Federal Mogul
Can any of the company-specific risk be diversified away by investing in both Kartonsan Karton 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 Kartonsan Karton and Federal Mogul 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 Federal Mogul Izmit, you can compare the effects of market volatilities on Kartonsan Karton 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 Kartonsan Karton with a short position of Federal Mogul. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kartonsan Karton and Federal Mogul.
Diversification Opportunities for Kartonsan Karton and Federal Mogul
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kartonsan and Federal is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Kartonsan Karton Sanayi 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 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 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 Kartonsan Karton i.e., Kartonsan Karton and Federal Mogul go up and down completely randomly.
Pair Corralation between Kartonsan Karton and Federal Mogul
Assuming the 90 days trading horizon Kartonsan Karton Sanayi is expected to under-perform the Federal Mogul. In addition to that, Kartonsan Karton is 1.13 times more volatile than Federal Mogul Izmit. It trades about -0.12 of its total potential returns per unit of risk. Federal Mogul Izmit is currently generating about 0.01 per unit of volatility. If you would invest 32,550 in Federal Mogul Izmit on June 24, 2024 and sell it today you would lose (300.00) from holding Federal Mogul Izmit or give up 0.92% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Kartonsan Karton Sanayi vs. Federal Mogul Izmit
Performance |
Timeline |
Kartonsan Karton Sanayi |
Federal Mogul Izmit |
Kartonsan Karton and Federal Mogul Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kartonsan Karton and Federal Mogul
The main advantage of trading using opposite Kartonsan Karton and Federal Mogul positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kartonsan Karton 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.Kartonsan Karton vs. Yapi ve Kredi | Kartonsan Karton vs. Turkiye Vakiflar Bankasi | Kartonsan Karton vs. ENKA Insaat ve | Kartonsan Karton vs. Akbank TAS |
Federal Mogul vs. Yapi ve Kredi | Federal Mogul vs. Turkiye Garanti Bankasi | Federal Mogul vs. Koc Holding AS | Federal Mogul vs. Turkiye Is Bankasi |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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