Correlation Between BIM Birlesik and Vestel Elektronik
Can any of the company-specific risk be diversified away by investing in both BIM Birlesik 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 BIM Birlesik and Vestel Elektronik into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BIM Birlesik Magazalar and Vestel Elektronik Sanayi, you can compare the effects of market volatilities on BIM Birlesik 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 BIM Birlesik with a short position of Vestel Elektronik. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIM Birlesik and Vestel Elektronik.
Diversification Opportunities for BIM Birlesik and Vestel Elektronik
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BIM and Vestel is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding BIM Birlesik Magazalar 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 BIM Birlesik 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 BIM Birlesik Magazalar 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 BIM Birlesik i.e., BIM Birlesik and Vestel Elektronik go up and down completely randomly.
Pair Corralation between BIM Birlesik and Vestel Elektronik
Assuming the 90 days trading horizon BIM Birlesik Magazalar is expected to generate 0.76 times more return on investment than Vestel Elektronik. However, BIM Birlesik Magazalar is 1.32 times less risky than Vestel Elektronik. It trades about 0.08 of its potential returns per unit of risk. Vestel Elektronik Sanayi is currently generating about -0.02 per unit of risk. If you would invest 36,679 in BIM Birlesik Magazalar on November 3, 2024 and sell it today you would earn a total of 18,321 from holding BIM Birlesik Magazalar or generate 49.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
BIM Birlesik Magazalar vs. Vestel Elektronik Sanayi
Performance |
| Timeline |
| BIM Birlesik Magazalar |
| Vestel Elektronik Sanayi |
BIM Birlesik and Vestel Elektronik Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BIM Birlesik and Vestel Elektronik
The main advantage of trading using opposite BIM Birlesik and Vestel Elektronik positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIM Birlesik 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.| BIM Birlesik vs. Eregli Demir ve | BIM Birlesik vs. Turkiye Petrol Rafinerileri | BIM Birlesik vs. Turkiye Sise ve | BIM Birlesik vs. Ford Otomotiv Sanayi |
| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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