Correlation Between Ege Endustri and DO AG
Can any of the company-specific risk be diversified away by investing in both Ege Endustri and DO AG 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 Ege Endustri and DO AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ege Endustri ve and DO AG, you can compare the effects of market volatilities on Ege Endustri and DO AG 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 Ege Endustri with a short position of DO AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ege Endustri and DO AG.
Diversification Opportunities for Ege Endustri and DO AG
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ege and DOCO is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Ege Endustri ve and DO AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DO AG and Ege Endustri 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 Ege Endustri ve are associated (or correlated) with DO AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DO AG has no effect on the direction of Ege Endustri i.e., Ege Endustri and DO AG go up and down completely randomly.
Pair Corralation between Ege Endustri and DO AG
Assuming the 90 days trading horizon Ege Endustri ve is expected to under-perform the DO AG. But the stock apears to be less risky and, when comparing its historical volatility, Ege Endustri ve is 1.07 times less risky than DO AG. The stock trades about -0.16 of its potential returns per unit of risk. The DO AG is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 617,250 in DO AG on December 6, 2024 and sell it today you would earn a total of 227,000 from holding DO AG or generate 36.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Ege Endustri ve vs. DO AG
Performance |
| Timeline |
| Ege Endustri ve |
| DO AG |
Ege Endustri and DO AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ege Endustri and DO AG
The main advantage of trading using opposite Ege Endustri and DO AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ege Endustri position performs unexpectedly, DO AG 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 DO AG will offset losses from the drop in DO AG's long position.| Ege Endustri vs. Ford Otomotiv Sanayi | ||
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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