Correlation Between Birlik Mensucat and IZDEMIR Enerji

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

Diversification Opportunities for Birlik Mensucat and IZDEMIR Enerji

0.54
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Birlik and IZDEMIR is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Birlik Mensucat Ticaret and IZDEMIR Enerji Elektrik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IZDEMIR Enerji Elektrik and Birlik Mensucat 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 Birlik Mensucat Ticaret are associated (or correlated) with IZDEMIR Enerji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IZDEMIR Enerji Elektrik has no effect on the direction of Birlik Mensucat i.e., Birlik Mensucat and IZDEMIR Enerji go up and down completely randomly.

Pair Corralation between Birlik Mensucat and IZDEMIR Enerji

Assuming the 90 days trading horizon Birlik Mensucat Ticaret is expected to generate 1.64 times more return on investment than IZDEMIR Enerji. However, Birlik Mensucat is 1.64 times more volatile than IZDEMIR Enerji Elektrik. It trades about 0.04 of its potential returns per unit of risk. IZDEMIR Enerji Elektrik is currently generating about -0.06 per unit of risk. If you would invest  529.00  in Birlik Mensucat Ticaret on August 26, 2024 and sell it today you would earn a total of  89.00  from holding Birlik Mensucat Ticaret or generate 16.82% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Birlik Mensucat Ticaret  vs.  IZDEMIR Enerji Elektrik

 Performance 
       Timeline  
Birlik Mensucat Ticaret 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Birlik Mensucat Ticaret are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Birlik Mensucat may actually be approaching a critical reversion point that can send shares even higher in December 2024.
IZDEMIR Enerji Elektrik 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days IZDEMIR Enerji Elektrik has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, IZDEMIR Enerji is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Birlik Mensucat and IZDEMIR Enerji Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Birlik Mensucat and IZDEMIR Enerji

The main advantage of trading using opposite Birlik Mensucat and IZDEMIR Enerji positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Birlik Mensucat position performs unexpectedly, IZDEMIR Enerji 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 IZDEMIR Enerji will offset losses from the drop in IZDEMIR Enerji's long position.
The idea behind Birlik Mensucat Ticaret and IZDEMIR Enerji Elektrik 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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