Correlation Between Arcelik AS and Vestel Elektronik
Can any of the company-specific risk be diversified away by investing in both Arcelik AS and Vestel Elektronik 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 Arcelik AS and Vestel Elektronik into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arcelik AS and Vestel Elektronik Sanayi, you can compare the effects of market volatilities on Arcelik AS and Vestel Elektronik 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 Arcelik AS with a short position of Vestel Elektronik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arcelik AS and Vestel Elektronik.
Diversification Opportunities for Arcelik AS and Vestel Elektronik
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Arcelik and Vestel is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Arcelik AS and Vestel Elektronik Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestel Elektronik Sanayi and Arcelik AS 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 Arcelik AS are associated (or correlated) with Vestel Elektronik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestel Elektronik Sanayi has no effect on the direction of Arcelik AS i.e., Arcelik AS and Vestel Elektronik go up and down completely randomly.
Pair Corralation between Arcelik AS and Vestel Elektronik
Assuming the 90 days trading horizon Arcelik AS is expected to generate 1.88 times less return on investment than Vestel Elektronik. But when comparing it to its historical volatility, Arcelik AS is 1.45 times less risky than Vestel Elektronik. It trades about 0.02 of its potential returns per unit of risk. Vestel Elektronik Sanayi is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 5,805 in Vestel Elektronik Sanayi on August 29, 2024 and sell it today you would earn a total of 415.00 from holding Vestel Elektronik Sanayi or generate 7.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arcelik AS vs. Vestel Elektronik Sanayi
Performance |
| Timeline |
| Arcelik AS |
| Vestel Elektronik Sanayi |
Arcelik AS and Vestel Elektronik Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arcelik AS and Vestel Elektronik
The main advantage of trading using opposite Arcelik AS and Vestel Elektronik positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arcelik AS position performs unexpectedly, Vestel Elektronik 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 Vestel Elektronik will offset losses from the drop in Vestel Elektronik's long position.| Arcelik AS vs. Turkiye Sise ve | Arcelik AS vs. Turkiye Petrol Rafinerileri | Arcelik AS vs. Tofas Turk Otomobil | Arcelik AS vs. Eregli Demir ve |
| Vestel Elektronik vs. Arcelik AS | Vestel Elektronik vs. Vestel Beyaz Esya | Vestel Elektronik vs. Eregli Demir ve | Vestel Elektronik vs. Turkiye Sise ve |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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