Correlation Between Ege Seramik and Eregli Demir
Can any of the company-specific risk be diversified away by investing in both Ege Seramik and Eregli Demir 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 Seramik and Eregli Demir into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ege Seramik Sanayi and Eregli Demir ve, you can compare the effects of market volatilities on Ege Seramik and Eregli Demir 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 Seramik with a short position of Eregli Demir. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ege Seramik and Eregli Demir.
Diversification Opportunities for Ege Seramik and Eregli Demir
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ege and Eregli is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Ege Seramik Sanayi and Eregli Demir ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eregli Demir ve and Ege Seramik 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 Seramik Sanayi are associated (or correlated) with Eregli Demir. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eregli Demir ve has no effect on the direction of Ege Seramik i.e., Ege Seramik and Eregli Demir go up and down completely randomly.
Pair Corralation between Ege Seramik and Eregli Demir
Assuming the 90 days trading horizon Ege Seramik Sanayi is expected to under-perform the Eregli Demir. But the stock apears to be less risky and, when comparing its historical volatility, Ege Seramik Sanayi is 1.87 times less risky than Eregli Demir. The stock trades about -0.13 of its potential returns per unit of risk. The Eregli Demir ve is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,250 in Eregli Demir ve on December 8, 2024 and sell it today you would earn a total of 230.00 from holding Eregli Demir ve or generate 10.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ege Seramik Sanayi vs. Eregli Demir ve
Performance |
| Timeline |
| Ege Seramik Sanayi |
| Eregli Demir ve |
Ege Seramik and Eregli Demir Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ege Seramik and Eregli Demir
The main advantage of trading using opposite Ege Seramik and Eregli Demir positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ege Seramik position performs unexpectedly, Eregli Demir 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 Eregli Demir will offset losses from the drop in Eregli Demir's long position.| Ege Seramik vs. Akcansa Cimento 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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