Correlation Between Brisa Bridgestone and Smart Gunes
Can any of the company-specific risk be diversified away by investing in both Brisa Bridgestone and Smart Gunes 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 Brisa Bridgestone and Smart Gunes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brisa Bridgestone Sabanci and Smart Gunes Enerjisi, you can compare the effects of market volatilities on Brisa Bridgestone and Smart Gunes 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 Brisa Bridgestone with a short position of Smart Gunes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brisa Bridgestone and Smart Gunes.
Diversification Opportunities for Brisa Bridgestone and Smart Gunes
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Brisa and Smart is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Brisa Bridgestone Sabanci and Smart Gunes Enerjisi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smart Gunes Enerjisi and Brisa Bridgestone 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 Brisa Bridgestone Sabanci are associated (or correlated) with Smart Gunes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smart Gunes Enerjisi has no effect on the direction of Brisa Bridgestone i.e., Brisa Bridgestone and Smart Gunes go up and down completely randomly.
Pair Corralation between Brisa Bridgestone and Smart Gunes
Assuming the 90 days trading horizon Brisa Bridgestone Sabanci is expected to generate 1.07 times more return on investment than Smart Gunes. However, Brisa Bridgestone is 1.07 times more volatile than Smart Gunes Enerjisi. It trades about 0.03 of its potential returns per unit of risk. Smart Gunes Enerjisi is currently generating about -0.07 per unit of risk. If you would invest 8,601 in Brisa Bridgestone Sabanci on August 26, 2024 and sell it today you would earn a total of 999.00 from holding Brisa Bridgestone Sabanci or generate 11.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brisa Bridgestone Sabanci vs. Smart Gunes Enerjisi
Performance |
| Timeline |
| Brisa Bridgestone Sabanci |
| Smart Gunes Enerjisi |
Brisa Bridgestone and Smart Gunes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brisa Bridgestone and Smart Gunes
The main advantage of trading using opposite Brisa Bridgestone and Smart Gunes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brisa Bridgestone position performs unexpectedly, Smart Gunes 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 Smart Gunes will offset losses from the drop in Smart Gunes' long position.| Brisa Bridgestone vs. Qnb Finansbank AS | Brisa Bridgestone vs. Kent Gida Maddeleri | Brisa Bridgestone vs. QNB Finans Finansal | Brisa Bridgestone vs. Turkiye Kalkinma Bankasi |
| Smart Gunes vs. Turkiye Kalkinma Bankasi | Smart Gunes vs. ICBC Turkey Bank | Smart Gunes vs. Politeknik Metal Sanayi | Smart Gunes vs. Cuhadaroglu Metal Sanayi |
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 CEOs Directory module to screen CEOs from public companies around the world.
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