Correlation Between Ege Gubre and Brisa Bridgestone
Can any of the company-specific risk be diversified away by investing in both Ege Gubre and Brisa Bridgestone 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 Gubre and Brisa Bridgestone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ege Gubre Sanayi and Brisa Bridgestone Sabanci, you can compare the effects of market volatilities on Ege Gubre and Brisa Bridgestone 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 Gubre with a short position of Brisa Bridgestone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ege Gubre and Brisa Bridgestone.
Diversification Opportunities for Ege Gubre and Brisa Bridgestone
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ege and Brisa is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Ege Gubre Sanayi and Brisa Bridgestone Sabanci in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brisa Bridgestone Sabanci and Ege Gubre 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 Gubre Sanayi are associated (or correlated) with Brisa Bridgestone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brisa Bridgestone Sabanci has no effect on the direction of Ege Gubre i.e., Ege Gubre and Brisa Bridgestone go up and down completely randomly.
Pair Corralation between Ege Gubre and Brisa Bridgestone
Assuming the 90 days trading horizon Ege Gubre Sanayi is expected to generate 2.46 times more return on investment than Brisa Bridgestone. However, Ege Gubre is 2.46 times more volatile than Brisa Bridgestone Sabanci. It trades about 0.04 of its potential returns per unit of risk. Brisa Bridgestone Sabanci is currently generating about 0.06 per unit of risk. If you would invest 3,552 in Ege Gubre Sanayi on August 30, 2024 and sell it today you would earn a total of 2,243 from holding Ege Gubre Sanayi or generate 63.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ege Gubre Sanayi vs. Brisa Bridgestone Sabanci
Performance |
| Timeline |
| Ege Gubre Sanayi |
| Brisa Bridgestone Sabanci |
Ege Gubre and Brisa Bridgestone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ege Gubre and Brisa Bridgestone
The main advantage of trading using opposite Ege Gubre and Brisa Bridgestone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ege Gubre position performs unexpectedly, Brisa Bridgestone 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 Brisa Bridgestone will offset losses from the drop in Brisa Bridgestone's long position.| Ege Gubre vs. Cuhadaroglu Metal Sanayi | Ege Gubre vs. Politeknik Metal Sanayi | Ege Gubre vs. ICBC Turkey Bank | Ege Gubre vs. Koza Anadolu Metal |
| Brisa Bridgestone vs. Aksa Akrilik Kimya | Brisa Bridgestone vs. Kordsa Global Endustriyel | Brisa Bridgestone vs. Tofas Turk Otomobil | Brisa Bridgestone vs. Arcelik AS |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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