Correlation Between Eregli Demir and Alarko Holding
Can any of the company-specific risk be diversified away by investing in both Eregli Demir and Alarko Holding 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 Eregli Demir and Alarko Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eregli Demir ve and Alarko Holding AS, you can compare the effects of market volatilities on Eregli Demir and Alarko Holding 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 Eregli Demir with a short position of Alarko Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eregli Demir and Alarko Holding.
Diversification Opportunities for Eregli Demir and Alarko Holding
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eregli and Alarko is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Eregli Demir ve and Alarko Holding AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alarko Holding AS and Eregli Demir 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 Eregli Demir ve are associated (or correlated) with Alarko Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alarko Holding AS has no effect on the direction of Eregli Demir i.e., Eregli Demir and Alarko Holding go up and down completely randomly.
Pair Corralation between Eregli Demir and Alarko Holding
Assuming the 90 days trading horizon Eregli Demir ve is expected to generate 0.9 times more return on investment than Alarko Holding. However, Eregli Demir ve is 1.11 times less risky than Alarko Holding. It trades about 0.01 of its potential returns per unit of risk. Alarko Holding AS is currently generating about -0.05 per unit of risk. If you would invest 2,246 in Eregli Demir ve on November 4, 2024 and sell it today you would lose (2.00) from holding Eregli Demir ve or give up 0.09% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Eregli Demir ve vs. Alarko Holding AS
Performance |
Timeline |
Eregli Demir ve |
Alarko Holding AS |
Eregli Demir and Alarko Holding Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eregli Demir and Alarko Holding
The main advantage of trading using opposite Eregli Demir and Alarko Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eregli Demir position performs unexpectedly, Alarko Holding 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 Alarko Holding will offset losses from the drop in Alarko Holding's long position.Eregli Demir vs. Gentas Genel Metal | Eregli Demir vs. Ege Seramik Sanayi | Eregli Demir vs. Ege Gubre Sanayi | Eregli Demir vs. Brisa Bridgestone Sabanci |
Alarko Holding vs. Turkiye Sise ve | Alarko Holding vs. Eregli Demir ve | Alarko Holding vs. Aksa Enerji Uretim | Alarko Holding vs. Turkiye Petrol Rafinerileri |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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