Correlation Between Eregli Demir and Bms Birlesik
Can any of the company-specific risk be diversified away by investing in both Eregli Demir and Bms Birlesik 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 Bms Birlesik 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 Bms Birlesik Metal, you can compare the effects of market volatilities on Eregli Demir and Bms Birlesik 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 Bms Birlesik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eregli Demir and Bms Birlesik.
Diversification Opportunities for Eregli Demir and Bms Birlesik
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Eregli and Bms is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Eregli Demir ve and Bms Birlesik Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bms Birlesik Metal 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 Bms Birlesik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bms Birlesik Metal has no effect on the direction of Eregli Demir i.e., Eregli Demir and Bms Birlesik go up and down completely randomly.
Pair Corralation between Eregli Demir and Bms Birlesik
Assuming the 90 days trading horizon Eregli Demir ve is expected to under-perform the Bms Birlesik. But the stock apears to be less risky and, when comparing its historical volatility, Eregli Demir ve is 1.31 times less risky than Bms Birlesik. The stock trades about -0.02 of its potential returns per unit of risk. The Bms Birlesik Metal is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 4,800 in Bms Birlesik Metal on August 25, 2024 and sell it today you would earn a total of 1,360 from holding Bms Birlesik Metal or generate 28.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eregli Demir ve vs. Bms Birlesik Metal
Performance |
| Timeline |
| Eregli Demir ve |
| Bms Birlesik Metal |
Eregli Demir and Bms Birlesik Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eregli Demir and Bms Birlesik
The main advantage of trading using opposite Eregli Demir and Bms Birlesik positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eregli Demir position performs unexpectedly, Bms Birlesik 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 Bms Birlesik will offset losses from the drop in Bms Birlesik's long position.| Eregli Demir vs. Qnb Finansbank AS | Eregli Demir vs. QNB Finans Finansal | Eregli Demir vs. Turkiye Kalkinma Bankasi | Eregli Demir vs. Kocaer Celik Sanayi |
| Bms Birlesik vs. Eregli Demir ve | Bms Birlesik vs. Iskenderun Demir ve | Bms Birlesik vs. Borusan Yatirim ve | Bms Birlesik vs. Kardemir Karabuk Demir |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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