Correlation Between IZDEMIR Enerji and Prizma Pres
Can any of the company-specific risk be diversified away by investing in both IZDEMIR Enerji and Prizma Pres 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 Prizma Pres 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 Prizma Pres Matbaacilik, you can compare the effects of market volatilities on IZDEMIR Enerji and Prizma Pres 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 Prizma Pres. Check out your portfolio center. Please also check ongoing floating volatility patterns of IZDEMIR Enerji and Prizma Pres.
Diversification Opportunities for IZDEMIR Enerji and Prizma Pres
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IZDEMIR and Prizma is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding IZDEMIR Enerji Elektrik and Prizma Pres Matbaacilik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prizma Pres Matbaacilik 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 Prizma Pres. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prizma Pres Matbaacilik has no effect on the direction of IZDEMIR Enerji i.e., IZDEMIR Enerji and Prizma Pres go up and down completely randomly.
Pair Corralation between IZDEMIR Enerji and Prizma Pres
Assuming the 90 days trading horizon IZDEMIR Enerji Elektrik is expected to under-perform the Prizma Pres. But the stock apears to be less risky and, when comparing its historical volatility, IZDEMIR Enerji Elektrik is 1.36 times less risky than Prizma Pres. The stock trades about -0.06 of its potential returns per unit of risk. The Prizma Pres Matbaacilik is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 5,100 in Prizma Pres Matbaacilik on August 26, 2024 and sell it today you would lose (2,050) from holding Prizma Pres Matbaacilik or give up 40.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IZDEMIR Enerji Elektrik vs. Prizma Pres Matbaacilik
Performance |
| Timeline |
| IZDEMIR Enerji Elektrik |
| Prizma Pres Matbaacilik |
IZDEMIR Enerji and Prizma Pres Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IZDEMIR Enerji and Prizma Pres
The main advantage of trading using opposite IZDEMIR Enerji and Prizma Pres positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IZDEMIR Enerji position performs unexpectedly, Prizma Pres 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 Prizma Pres will offset losses from the drop in Prizma Pres' long position.| IZDEMIR Enerji vs. Silverline Endustri ve | IZDEMIR Enerji vs. Cuhadaroglu Metal Sanayi | IZDEMIR Enerji vs. Mackolik Internet Hizmetleri | IZDEMIR Enerji vs. Akcansa Cimento 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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