Correlation Between Dogu Aras and AG Anadolu

Can any of the company-specific risk be diversified away by investing in both Dogu Aras and AG Anadolu 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 Dogu Aras and AG Anadolu into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dogu Aras Enerji and AG Anadolu Group, you can compare the effects of market volatilities on Dogu Aras and AG Anadolu 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 Dogu Aras with a short position of AG Anadolu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dogu Aras and AG Anadolu.

Diversification Opportunities for Dogu Aras and AG Anadolu

-0.31

Correlation Coefficient

Dogu Aras  AG Anadolu

Very good diversification

The 3 months correlation between Dogu and AGHOL is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Dogu Aras Enerji and AG Anadolu Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AG Anadolu Group and Dogu Aras 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 Dogu Aras Enerji are associated (or correlated) with AG Anadolu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AG Anadolu Group has no effect on the direction of Dogu Aras i.e., Dogu Aras and AG Anadolu go up and down completely randomly.

Pair Corralation between Dogu Aras and AG Anadolu

Assuming the 90 days trading horizon Dogu Aras Enerji is expected to generate 4.52 times more return on investment than AG Anadolu. However, Dogu Aras is 4.52 times more volatile than AG Anadolu Group. It trades about 0.03 of its potential returns per unit of risk. AG Anadolu Group is currently generating about 0.1 per unit of risk. If you would invest  5,929  in Dogu Aras Enerji on September 23, 2024 and sell it today you would lose (699.00) from holding Dogu Aras Enerji or give up 11.79% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.2%
Values	Daily Returns

Dogu Aras Enerji  vs.  AG Anadolu Group

Dogu Aras Enerji

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dogu Aras Enerji has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

AG Anadolu Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AG Anadolu Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, AG Anadolu may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Dogu Aras and AG Anadolu

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

The idea behind Dogu Aras Enerji and AG Anadolu Group 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.