Correlation Between Ford Otomotiv and Birlik Mensucat
Can any of the company-specific risk be diversified away by investing in both Ford Otomotiv 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 Ford Otomotiv and Birlik Mensucat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Otomotiv Sanayi and Birlik Mensucat Ticaret, you can compare the effects of market volatilities on Ford Otomotiv 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 Ford Otomotiv with a short position of Birlik Mensucat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford Otomotiv and Birlik Mensucat.
Diversification Opportunities for Ford Otomotiv and Birlik Mensucat
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ford and Birlik is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Ford Otomotiv Sanayi 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 Ford Otomotiv 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 Ford Otomotiv Sanayi 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 Ford Otomotiv i.e., Ford Otomotiv and Birlik Mensucat go up and down completely randomly.
Pair Corralation between Ford Otomotiv and Birlik Mensucat
Assuming the 90 days trading horizon Ford Otomotiv is expected to generate 5.85 times less return on investment than Birlik Mensucat. But when comparing it to its historical volatility, Ford Otomotiv Sanayi is 2.14 times less risky than Birlik Mensucat. It trades about 0.03 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Otomotiv Sanayi vs. Birlik Mensucat Ticaret
Performance |
| Timeline |
| Ford Otomotiv Sanayi |
| Birlik Mensucat Ticaret |
Ford Otomotiv and Birlik Mensucat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford Otomotiv and Birlik Mensucat
The main advantage of trading using opposite Ford Otomotiv and Birlik Mensucat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford Otomotiv 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.| Ford Otomotiv vs. Eregli Demir ve | Ford Otomotiv vs. Tofas Turk Otomobil | Ford Otomotiv vs. Turkiye Petrol Rafinerileri | Ford Otomotiv vs. Turkiye Sise ve |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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