Correlation Between Alfas Solar and Celebi Hava

Can any of the company-specific risk be diversified away by investing in both Alfas Solar and Celebi Hava 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 Alfas Solar and Celebi Hava into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alfas Solar Enerji and Celebi Hava Servisi, you can compare the effects of market volatilities on Alfas Solar and Celebi Hava 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 Alfas Solar with a short position of Celebi Hava. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfas Solar and Celebi Hava.

Diversification Opportunities for Alfas Solar and Celebi Hava

0.28

Correlation Coefficient

Alfas Solar  Celebi Hava

Modest diversification

The 3 months correlation between Alfas and Celebi is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Alfas Solar Enerji and Celebi Hava Servisi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celebi Hava Servisi and Alfas Solar 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 Alfas Solar Enerji are associated (or correlated) with Celebi Hava. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celebi Hava Servisi has no effect on the direction of Alfas Solar i.e., Alfas Solar and Celebi Hava go up and down completely randomly.

Pair Corralation between Alfas Solar and Celebi Hava

Assuming the 90 days trading horizon Alfas Solar Enerji is expected to generate 1.34 times more return on investment than Celebi Hava. However, Alfas Solar is 1.34 times more volatile than Celebi Hava Servisi. It trades about 0.09 of its potential returns per unit of risk. Celebi Hava Servisi is currently generating about -0.02 per unit of risk. If you would invest  5,400  in Alfas Solar Enerji on September 22, 2024 and sell it today you would earn a total of  895.00  from holding Alfas Solar Enerji or generate 16.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Alfas Solar Enerji  vs.  Celebi Hava Servisi

Alfas Solar Enerji

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alfas Solar Enerji are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Alfas Solar demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Celebi Hava Servisi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Celebi Hava Servisi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Celebi Hava is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Alfas Solar and Celebi Hava

The main advantage of trading using opposite Alfas Solar and Celebi Hava positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfas Solar position performs unexpectedly, Celebi Hava 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 Celebi Hava will offset losses from the drop in Celebi Hava's long position.

The idea behind Alfas Solar Enerji and Celebi Hava Servisi pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.