Correlation Between DO AG and Gentas Genel
Can any of the company-specific risk be diversified away by investing in both DO AG and Gentas Genel 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 DO AG and Gentas Genel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DO AG and Gentas Genel Metal, you can compare the effects of market volatilities on DO AG and Gentas Genel 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 DO AG with a short position of Gentas Genel. Check out your portfolio center. Please also check ongoing floating volatility patterns of DO AG and Gentas Genel.
Diversification Opportunities for DO AG and Gentas Genel
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DOCO and Gentas is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding DO AG and Gentas Genel Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentas Genel Metal and DO AG 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 DO AG are associated (or correlated) with Gentas Genel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentas Genel Metal has no effect on the direction of DO AG i.e., DO AG and Gentas Genel go up and down completely randomly.
Pair Corralation between DO AG and Gentas Genel
Assuming the 90 days trading horizon DO AG is expected to generate 0.96 times more return on investment than Gentas Genel. However, DO AG is 1.04 times less risky than Gentas Genel. It trades about 0.06 of its potential returns per unit of risk. Gentas Genel Metal is currently generating about 0.02 per unit of risk. If you would invest 513,500 in DO AG on September 3, 2024 and sell it today you would earn a total of 78,000 from holding DO AG or generate 15.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DO AG vs. Gentas Genel Metal
Performance |
| Timeline |
| DO AG |
| Gentas Genel Metal |
DO AG and Gentas Genel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DO AG and Gentas Genel
The main advantage of trading using opposite DO AG and Gentas Genel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DO AG position performs unexpectedly, Gentas Genel 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 Gentas Genel will offset losses from the drop in Gentas Genel's long position.The idea behind DO AG and Gentas Genel Metal 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.| Gentas Genel vs. Turkiye Petrol Rafinerileri | Gentas Genel vs. Koc Holding AS | Gentas Genel vs. Arcelik AS | Gentas Genel vs. Turkiye Garanti 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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