Correlation Between IZDEMIR Enerji and Ford Otomotiv
Can any of the company-specific risk be diversified away by investing in both IZDEMIR Enerji 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 IZDEMIR Enerji and Ford Otomotiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IZDEMIR Enerji Elektrik and Ford Otomotiv Sanayi, you can compare the effects of market volatilities on IZDEMIR Enerji 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 IZDEMIR Enerji with a short position of Ford Otomotiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of IZDEMIR Enerji and Ford Otomotiv.
Diversification Opportunities for IZDEMIR Enerji and Ford Otomotiv
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IZDEMIR and Ford is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding IZDEMIR Enerji Elektrik 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 IZDEMIR Enerji 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 IZDEMIR Enerji Elektrik 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 IZDEMIR Enerji i.e., IZDEMIR Enerji and Ford Otomotiv go up and down completely randomly.
Pair Corralation between IZDEMIR Enerji and Ford Otomotiv
Assuming the 90 days trading horizon IZDEMIR Enerji is expected to generate 2.57 times less return on investment than Ford Otomotiv. In addition to that, IZDEMIR Enerji is 1.55 times more volatile than Ford Otomotiv Sanayi. It trades about 0.02 of its total potential returns per unit of risk. Ford Otomotiv Sanayi is currently generating about 0.08 per unit of volatility. If you would invest 44,254 in Ford Otomotiv Sanayi on September 14, 2024 and sell it today you would earn a total of 54,446 from holding Ford Otomotiv Sanayi or generate 123.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 67.47% |
| Values | Daily Returns |
IZDEMIR Enerji Elektrik vs. Ford Otomotiv Sanayi
Performance |
| Timeline |
| IZDEMIR Enerji Elektrik |
| Ford Otomotiv Sanayi |
IZDEMIR Enerji and Ford Otomotiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IZDEMIR Enerji and Ford Otomotiv
The main advantage of trading using opposite IZDEMIR Enerji and Ford Otomotiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IZDEMIR Enerji 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.| IZDEMIR Enerji vs. Gentas Genel Metal | IZDEMIR Enerji vs. Borlease Otomotiv AS | IZDEMIR Enerji vs. ICBC Turkey Bank | IZDEMIR Enerji vs. Cuhadaroglu Metal Sanayi |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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