Correlation Between Eregli Demir and Birlik Mensucat
Can any of the company-specific risk be diversified away by investing in both Eregli Demir and Birlik Mensucat 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 Birlik Mensucat 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 Birlik Mensucat Ticaret, you can compare the effects of market volatilities on Eregli Demir and Birlik Mensucat 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 Birlik Mensucat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eregli Demir and Birlik Mensucat.
Diversification Opportunities for Eregli Demir and Birlik Mensucat
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Eregli and Birlik is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Eregli Demir ve and Birlik Mensucat Ticaret in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Birlik Mensucat Ticaret 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 Birlik Mensucat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Birlik Mensucat Ticaret has no effect on the direction of Eregli Demir i.e., Eregli Demir and Birlik Mensucat go up and down completely randomly.
Pair Corralation between Eregli Demir and Birlik Mensucat
Assuming the 90 days trading horizon Eregli Demir is expected to generate 4.31 times less return on investment than Birlik Mensucat. But when comparing it to its historical volatility, Eregli Demir ve is 2.76 times less risky than Birlik Mensucat. It trades about 0.05 of its potential returns per unit of risk. Birlik Mensucat Ticaret is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 586.00 in Birlik Mensucat Ticaret on September 2, 2024 and sell it today you would earn a total of 103.00 from holding Birlik Mensucat Ticaret or generate 17.58% 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. Birlik Mensucat Ticaret
Performance |
| Timeline |
| Eregli Demir ve |
| Birlik Mensucat Ticaret |
Eregli Demir and Birlik Mensucat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eregli Demir and Birlik Mensucat
The main advantage of trading using opposite Eregli Demir and Birlik Mensucat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eregli Demir position performs unexpectedly, Birlik Mensucat 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 Birlik Mensucat will offset losses from the drop in Birlik Mensucat's long position.| Eregli Demir vs. Turkiye Sise ve | Eregli Demir vs. Turkiye Petrol Rafinerileri | Eregli Demir vs. Ford Otomotiv Sanayi | Eregli Demir vs. Petkim Petrokimya Holding |
| Birlik Mensucat vs. Politeknik Metal Sanayi | Birlik Mensucat vs. Bms Birlesik Metal | Birlik Mensucat vs. Turkiye Kalkinma Bankasi | Birlik Mensucat vs. Koza Anadolu Metal |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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