Correlation Between Ford Otomotiv and Ege Gubre
Can any of the company-specific risk be diversified away by investing in both Ford Otomotiv and Ege Gubre 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 Ege Gubre 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 Ege Gubre Sanayi, you can compare the effects of market volatilities on Ford Otomotiv and Ege Gubre 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 Ege Gubre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford Otomotiv and Ege Gubre.
Diversification Opportunities for Ford Otomotiv and Ege Gubre
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ford and Ege is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Ford Otomotiv Sanayi and Ege Gubre Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ege Gubre Sanayi 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 Ege Gubre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ege Gubre Sanayi has no effect on the direction of Ford Otomotiv i.e., Ford Otomotiv and Ege Gubre go up and down completely randomly.
Pair Corralation between Ford Otomotiv and Ege Gubre
Assuming the 90 days trading horizon Ford Otomotiv is expected to generate 1.42 times less return on investment than Ege Gubre. But when comparing it to its historical volatility, Ford Otomotiv Sanayi is 3.0 times less risky than Ege Gubre. It trades about 0.09 of its potential returns per unit of risk. Ege Gubre Sanayi is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,552 in Ege Gubre Sanayi on August 30, 2024 and sell it today you would earn a total of 2,243 from holding Ege Gubre Sanayi or generate 63.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Otomotiv Sanayi vs. Ege Gubre Sanayi
Performance |
| Timeline |
| Ford Otomotiv Sanayi |
| Ege Gubre Sanayi |
Ford Otomotiv and Ege Gubre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford Otomotiv and Ege Gubre
The main advantage of trading using opposite Ford Otomotiv and Ege Gubre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford Otomotiv position performs unexpectedly, Ege Gubre 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 Ege Gubre will offset losses from the drop in Ege Gubre'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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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