Correlation Between Eregli Demir and Ford Otomotiv
Can any of the company-specific risk be diversified away by investing in both Eregli Demir and Ford Otomotiv 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 Ford Otomotiv 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 Ford Otomotiv Sanayi, you can compare the effects of market volatilities on Eregli Demir and Ford Otomotiv 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 Ford Otomotiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eregli Demir and Ford Otomotiv.
Diversification Opportunities for Eregli Demir and Ford Otomotiv
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eregli and Ford is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Eregli Demir ve and Ford Otomotiv Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ford Otomotiv Sanayi 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 Ford Otomotiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ford Otomotiv Sanayi has no effect on the direction of Eregli Demir i.e., Eregli Demir and Ford Otomotiv go up and down completely randomly.
Pair Corralation between Eregli Demir and Ford Otomotiv
Assuming the 90 days trading horizon Eregli Demir ve is expected to under-perform the Ford Otomotiv. But the stock apears to be less risky and, when comparing its historical volatility, Eregli Demir ve is 1.05 times less risky than Ford Otomotiv. The stock trades about -0.25 of its potential returns per unit of risk. The Ford Otomotiv Sanayi is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 94,050 in Ford Otomotiv Sanayi on November 2, 2024 and sell it today you would earn a total of 50.00 from holding Ford Otomotiv Sanayi or generate 0.05% 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. Ford Otomotiv Sanayi
Performance |
| Timeline |
| Eregli Demir ve |
| Ford Otomotiv Sanayi |
Eregli Demir and Ford Otomotiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eregli Demir and Ford Otomotiv
The main advantage of trading using opposite Eregli Demir and Ford Otomotiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eregli Demir position performs unexpectedly, Ford Otomotiv 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 Ford Otomotiv will offset losses from the drop in Ford Otomotiv's long position.| Eregli Demir vs. Is Finansal Kiralama | Eregli Demir vs. Zorlu Enerji Elektrik | Eregli Demir vs. Karsan Otomotiv Sanayi | Eregli Demir vs. Eminis Ambalaj Sanayi |
| Ford Otomotiv vs. Eregli Demir ve | Ford Otomotiv vs. Tofas Turk Otomobil | Ford Otomotiv vs. Turkiye Petrol Rafinerileri | Ford Otomotiv vs. Turkiye Sise ve |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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