Correlation Between Ford Otomotiv and ENKA Insaat
Can any of the company-specific risk be diversified away by investing in both Ford Otomotiv 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 Ford Otomotiv and ENKA Insaat 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 ENKA Insaat ve, you can compare the effects of market volatilities on Ford Otomotiv 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 Ford Otomotiv with a short position of ENKA Insaat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford Otomotiv and ENKA Insaat.
Diversification Opportunities for Ford Otomotiv and ENKA Insaat
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ford and ENKA is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Ford Otomotiv Sanayi 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 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 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 Ford Otomotiv i.e., Ford Otomotiv and ENKA Insaat go up and down completely randomly.
Pair Corralation between Ford Otomotiv and ENKA Insaat
Assuming the 90 days trading horizon Ford Otomotiv Sanayi is expected to generate 0.7 times more return on investment than ENKA Insaat. However, Ford Otomotiv Sanayi is 1.43 times less risky than ENKA Insaat. It trades about -0.06 of its potential returns per unit of risk. ENKA Insaat ve is currently generating about -0.07 per unit of risk. If you would invest 91,400 in Ford Otomotiv Sanayi on November 28, 2024 and sell it today you would lose (2,450) from holding Ford Otomotiv Sanayi or give up 2.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ford Otomotiv Sanayi vs. ENKA Insaat ve
Performance |
| Timeline |
| Ford Otomotiv Sanayi |
| ENKA Insaat ve |
Ford Otomotiv and ENKA Insaat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford Otomotiv and ENKA Insaat
The main advantage of trading using opposite Ford Otomotiv and ENKA Insaat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford Otomotiv 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.| Ford Otomotiv vs. Eregli Demir ve | Ford Otomotiv vs. Tofas Turk Otomobil | Ford Otomotiv vs. Turkiye Petrol Rafinerileri | Ford Otomotiv vs. Turkiye Sise ve |
| ENKA Insaat vs. Turkiye Sise ve | ENKA Insaat vs. Eregli Demir ve | ENKA Insaat vs. Koc Holding AS | ENKA Insaat vs. Haci Omer Sabanci |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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