Correlation Between Eregli Demir and ENKA Insaat
Can any of the company-specific risk be diversified away by investing in both Eregli Demir and ENKA Insaat 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 ENKA Insaat 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 ENKA Insaat ve, you can compare the effects of market volatilities on Eregli Demir and ENKA Insaat 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 ENKA Insaat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eregli Demir and ENKA Insaat.
Diversification Opportunities for Eregli Demir and ENKA Insaat
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eregli and ENKA is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Eregli Demir ve and ENKA Insaat ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENKA Insaat ve 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 ENKA Insaat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENKA Insaat ve has no effect on the direction of Eregli Demir i.e., Eregli Demir and ENKA Insaat go up and down completely randomly.
Pair Corralation between Eregli Demir and ENKA Insaat
Assuming the 90 days trading horizon Eregli Demir ve is expected to under-perform the ENKA Insaat. But the stock apears to be less risky and, when comparing its historical volatility, Eregli Demir ve is 1.86 times less risky than ENKA Insaat. The stock trades about -0.39 of its potential returns per unit of risk. The ENKA Insaat ve is currently generating about -0.08 of returns per unit of risk over similar time horizon. 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 |
Eregli Demir ve vs. ENKA Insaat ve
Performance |
| Timeline |
| Eregli Demir ve |
| ENKA Insaat ve |
Eregli Demir and ENKA Insaat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eregli Demir and ENKA Insaat
The main advantage of trading using opposite Eregli Demir and ENKA Insaat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eregli Demir position performs unexpectedly, ENKA Insaat 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 ENKA Insaat will offset losses from the drop in ENKA Insaat'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 |
| ENKA Insaat vs. BIM Birlesik Magazalar | ENKA Insaat vs. Haci Omer Sabanci | ENKA Insaat vs. AG Anadolu Group | ENKA Insaat vs. Sok Marketler Ticaret |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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