Correlation Between ENKA Insaat and Eregli Demir
Can any of the company-specific risk be diversified away by investing in both ENKA Insaat 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 ENKA Insaat and Eregli Demir into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENKA Insaat ve and Eregli Demir ve, you can compare the effects of market volatilities on ENKA Insaat 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 ENKA Insaat with a short position of Eregli Demir. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENKA Insaat and Eregli Demir.
Diversification Opportunities for ENKA Insaat and Eregli Demir
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ENKA and Eregli is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding ENKA Insaat ve 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 ENKA Insaat 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 ENKA Insaat ve 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 ENKA Insaat i.e., ENKA Insaat and Eregli Demir go up and down completely randomly.
Pair Corralation between ENKA Insaat and Eregli Demir
Assuming the 90 days trading horizon ENKA Insaat ve is expected to generate 1.86 times more return on investment than Eregli Demir. However, ENKA Insaat is 1.86 times more volatile than Eregli Demir ve. It trades about -0.08 of its potential returns per unit of risk. Eregli Demir ve is currently generating about -0.39 per unit of risk. If you would invest 5,250 in ENKA Insaat ve on October 20, 2024 and sell it today you would lose (205.00) from holding ENKA Insaat ve or give up 3.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ENKA Insaat ve vs. Eregli Demir ve
Performance |
| Timeline |
| ENKA Insaat ve |
| Eregli Demir ve |
ENKA Insaat and Eregli Demir Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENKA Insaat and Eregli Demir
The main advantage of trading using opposite ENKA Insaat and Eregli Demir positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENKA Insaat 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.| ENKA Insaat vs. BIM Birlesik Magazalar | ENKA Insaat vs. Haci Omer Sabanci | ENKA Insaat vs. AG Anadolu Group | ENKA Insaat vs. Sok Marketler Ticaret |
| Eregli Demir vs. Turkiye Sise ve | Eregli Demir vs. Turkiye Petrol Rafinerileri | Eregli Demir vs. Ford Otomotiv Sanayi | Eregli Demir vs. Petkim Petrokimya Holding |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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