Correlation Between Eregli Demir and Galatasaray Sportif
Can any of the company-specific risk be diversified away by investing in both Eregli Demir and Galatasaray Sportif 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 Galatasaray Sportif 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 Galatasaray Sportif Sinai, you can compare the effects of market volatilities on Eregli Demir and Galatasaray Sportif 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 Galatasaray Sportif. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eregli Demir and Galatasaray Sportif.
Diversification Opportunities for Eregli Demir and Galatasaray Sportif
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eregli and Galatasaray is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Eregli Demir ve and Galatasaray Sportif Sinai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galatasaray Sportif Sinai 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 Galatasaray Sportif. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galatasaray Sportif Sinai has no effect on the direction of Eregli Demir i.e., Eregli Demir and Galatasaray Sportif go up and down completely randomly.
Pair Corralation between Eregli Demir and Galatasaray Sportif
Assuming the 90 days trading horizon Eregli Demir is expected to generate 1.44 times less return on investment than Galatasaray Sportif. In addition to that, Eregli Demir is 1.05 times more volatile than Galatasaray Sportif Sinai. It trades about 0.03 of its total potential returns per unit of risk. Galatasaray Sportif Sinai is currently generating about 0.04 per unit of volatility. If you would invest 421.00 in Galatasaray Sportif Sinai on September 3, 2024 and sell it today you would earn a total of 281.00 from holding Galatasaray Sportif Sinai or generate 66.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eregli Demir ve vs. Galatasaray Sportif Sinai
Performance |
| Timeline |
| Eregli Demir ve |
| Galatasaray Sportif Sinai |
Eregli Demir and Galatasaray Sportif Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eregli Demir and Galatasaray Sportif
The main advantage of trading using opposite Eregli Demir and Galatasaray Sportif positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eregli Demir position performs unexpectedly, Galatasaray Sportif 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 Galatasaray Sportif will offset losses from the drop in Galatasaray Sportif's long position.| Eregli Demir vs. Qnb Finansbank AS | Eregli Demir vs. Turkiye Kalkinma Bankasi | Eregli Demir vs. Kocaer Celik Sanayi | Eregli Demir vs. Cimentas Izmir Cimento |
| Galatasaray Sportif vs. Koc Holding AS | Galatasaray Sportif vs. ENKA Insaat ve | Galatasaray Sportif vs. Arcelik AS | Galatasaray Sportif vs. Eregli Demir 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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