Correlation Between Eregli Demir and Enerjisa Enerji
Can any of the company-specific risk be diversified away by investing in both Eregli Demir and Enerjisa Enerji 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 Enerjisa Enerji 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 Enerjisa Enerji AS, you can compare the effects of market volatilities on Eregli Demir and Enerjisa Enerji 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 Enerjisa Enerji. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eregli Demir and Enerjisa Enerji.
Diversification Opportunities for Eregli Demir and Enerjisa Enerji
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eregli and Enerjisa is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Eregli Demir ve and Enerjisa Enerji AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enerjisa Enerji 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 Enerjisa Enerji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enerjisa Enerji AS has no effect on the direction of Eregli Demir i.e., Eregli Demir and Enerjisa Enerji go up and down completely randomly.
Pair Corralation between Eregli Demir and Enerjisa Enerji
Assuming the 90 days trading horizon Eregli Demir is expected to generate 1.08 times less return on investment than Enerjisa Enerji. In addition to that, Eregli Demir is 1.97 times more volatile than Enerjisa Enerji AS. It trades about 0.03 of its total potential returns per unit of risk. Enerjisa Enerji AS is currently generating about 0.06 per unit of volatility. If you would invest 3,106 in Enerjisa Enerji AS on October 14, 2024 and sell it today you would earn a total of 2,929 from holding Enerjisa Enerji AS or generate 94.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eregli Demir ve vs. Enerjisa Enerji AS
Performance |
| Timeline |
| Eregli Demir ve |
| Enerjisa Enerji AS |
Eregli Demir and Enerjisa Enerji Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eregli Demir and Enerjisa Enerji
The main advantage of trading using opposite Eregli Demir and Enerjisa Enerji positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eregli Demir position performs unexpectedly, Enerjisa Enerji 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 Enerjisa Enerji will offset losses from the drop in Enerjisa Enerji'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 |
| Enerjisa Enerji vs. Eregli Demir ve | Enerjisa Enerji vs. Turkiye Sise ve | Enerjisa Enerji vs. Tofas Turk Otomobil | Enerjisa Enerji vs. Ford Otomotiv Sanayi |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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