Correlation Between Kent Gida and Vestel Elektronik
Can any of the company-specific risk be diversified away by investing in both Kent Gida and Vestel Elektronik 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 Kent Gida and Vestel Elektronik into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kent Gida Maddeleri and Vestel Elektronik Sanayi, you can compare the effects of market volatilities on Kent Gida and Vestel Elektronik 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 Kent Gida with a short position of Vestel Elektronik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kent Gida and Vestel Elektronik.
Diversification Opportunities for Kent Gida and Vestel Elektronik
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kent and Vestel is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Kent Gida Maddeleri and Vestel Elektronik Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestel Elektronik Sanayi and Kent Gida 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 Kent Gida Maddeleri are associated (or correlated) with Vestel Elektronik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestel Elektronik Sanayi has no effect on the direction of Kent Gida i.e., Kent Gida and Vestel Elektronik go up and down completely randomly.
Pair Corralation between Kent Gida and Vestel Elektronik
Assuming the 90 days trading horizon Kent Gida is expected to generate 1.07 times less return on investment than Vestel Elektronik. In addition to that, Kent Gida is 1.3 times more volatile than Vestel Elektronik Sanayi. It trades about 0.1 of its total potential returns per unit of risk. Vestel Elektronik Sanayi is currently generating about 0.13 per unit of volatility. If you would invest 5,825 in Vestel Elektronik Sanayi on August 29, 2024 and sell it today you would earn a total of 395.00 from holding Vestel Elektronik Sanayi or generate 6.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kent Gida Maddeleri vs. Vestel Elektronik Sanayi
Performance |
| Timeline |
| Kent Gida Maddeleri |
| Vestel Elektronik Sanayi |
Kent Gida and Vestel Elektronik Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kent Gida and Vestel Elektronik
The main advantage of trading using opposite Kent Gida and Vestel Elektronik positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kent Gida position performs unexpectedly, Vestel Elektronik 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 Vestel Elektronik will offset losses from the drop in Vestel Elektronik's long position.| Kent Gida vs. Gentas Genel Metal | Kent Gida vs. MEGA METAL | Kent Gida vs. Koza Anadolu Metal | Kent Gida 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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