Correlation Between Vestel Elektronik and Arcelik AS
Can any of the company-specific risk be diversified away by investing in both Vestel Elektronik and Arcelik AS 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 Vestel Elektronik and Arcelik AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vestel Elektronik Sanayi and Arcelik AS, you can compare the effects of market volatilities on Vestel Elektronik and Arcelik AS 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 Vestel Elektronik with a short position of Arcelik AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vestel Elektronik and Arcelik AS.
Diversification Opportunities for Vestel Elektronik and Arcelik AS
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vestel and Arcelik is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Vestel Elektronik Sanayi and Arcelik AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcelik AS and Vestel Elektronik 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 Vestel Elektronik Sanayi are associated (or correlated) with Arcelik AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcelik AS has no effect on the direction of Vestel Elektronik i.e., Vestel Elektronik and Arcelik AS go up and down completely randomly.
Pair Corralation between Vestel Elektronik and Arcelik AS
Assuming the 90 days trading horizon Vestel Elektronik Sanayi is expected to generate 1.03 times more return on investment than Arcelik AS. However, Vestel Elektronik is 1.03 times more volatile than Arcelik AS. It trades about 0.09 of its potential returns per unit of risk. Arcelik AS is currently generating about 0.03 per unit of risk. If you would invest 5,850 in Vestel Elektronik Sanayi on August 25, 2024 and sell it today you would earn a total of 240.00 from holding Vestel Elektronik Sanayi or generate 4.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Vestel Elektronik Sanayi vs. Arcelik AS
Performance |
| Timeline |
| Vestel Elektronik Sanayi |
| Arcelik AS |
Vestel Elektronik and Arcelik AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vestel Elektronik and Arcelik AS
The main advantage of trading using opposite Vestel Elektronik and Arcelik AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vestel Elektronik position performs unexpectedly, Arcelik AS 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 Arcelik AS will offset losses from the drop in Arcelik AS's long position.| Vestel Elektronik vs. Arcelik AS | Vestel Elektronik vs. Vestel Beyaz Esya | Vestel Elektronik vs. Eregli Demir ve | Vestel Elektronik 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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