Correlation Between Ege Gubre and Kafein Yazilim
Can any of the company-specific risk be diversified away by investing in both Ege Gubre and Kafein Yazilim 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 Kafein Yazilim 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 Kafein Yazilim, you can compare the effects of market volatilities on Ege Gubre and Kafein Yazilim 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 Kafein Yazilim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ege Gubre and Kafein Yazilim.
Diversification Opportunities for Ege Gubre and Kafein Yazilim
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ege and Kafein is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Ege Gubre Sanayi and Kafein Yazilim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kafein Yazilim 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 Kafein Yazilim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kafein Yazilim has no effect on the direction of Ege Gubre i.e., Ege Gubre and Kafein Yazilim go up and down completely randomly.
Pair Corralation between Ege Gubre and Kafein Yazilim
Assuming the 90 days trading horizon Ege Gubre Sanayi is expected to under-perform the Kafein Yazilim. But the stock apears to be less risky and, when comparing its historical volatility, Ege Gubre Sanayi is 1.29 times less risky than Kafein Yazilim. The stock trades about -0.1 of its potential returns per unit of risk. The Kafein Yazilim is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 10,300 in Kafein Yazilim on September 3, 2024 and sell it today you would lose (1,840) from holding Kafein Yazilim or give up 17.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ege Gubre Sanayi vs. Kafein Yazilim
Performance |
| Timeline |
| Ege Gubre Sanayi |
| Kafein Yazilim |
Ege Gubre and Kafein Yazilim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ege Gubre and Kafein Yazilim
The main advantage of trading using opposite Ege Gubre and Kafein Yazilim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ege Gubre position performs unexpectedly, Kafein Yazilim 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 Kafein Yazilim will offset losses from the drop in Kafein Yazilim's long position.| Ege Gubre vs. Politeknik Metal Sanayi | Ege Gubre vs. Gentas Genel Metal | Ege Gubre vs. MEGA METAL | Ege Gubre vs. Koza Anadolu Metal |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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