Correlation Between Aselsan Elektronik and ENKA Insaat

Can any of the company-specific risk be diversified away by investing in both Aselsan Elektronik and ENKA Insaat 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 Aselsan Elektronik and ENKA Insaat into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aselsan Elektronik Sanayi and ENKA Insaat ve, you can compare the effects of market volatilities on Aselsan Elektronik and ENKA Insaat 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 Aselsan Elektronik with a short position of ENKA Insaat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aselsan Elektronik and ENKA Insaat.

Diversification Opportunities for Aselsan Elektronik and ENKA Insaat

0.71

Correlation Coefficient

Aselsan Elektronik  ENKA Insaat

Poor diversification

The 3 months correlation between Aselsan and ENKA is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Aselsan Elektronik Sanayi and ENKA Insaat ve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENKA Insaat ve and Aselsan 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 Aselsan Elektronik Sanayi are associated (or correlated) with ENKA Insaat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENKA Insaat ve has no effect on the direction of Aselsan Elektronik i.e., Aselsan Elektronik and ENKA Insaat go up and down completely randomly.

Pair Corralation between Aselsan Elektronik and ENKA Insaat

Assuming the 90 days trading horizon Aselsan Elektronik Sanayi is expected to generate 0.84 times more return on investment than ENKA Insaat. However, Aselsan Elektronik Sanayi is 1.19 times less risky than ENKA Insaat. It trades about 0.16 of its potential returns per unit of risk. ENKA Insaat ve is currently generating about 0.03 per unit of risk. If you would invest  5,671  in Aselsan Elektronik Sanayi on September 4, 2024 and sell it today you would earn a total of  1,349  from holding Aselsan Elektronik Sanayi or generate 23.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Aselsan Elektronik Sanayi  vs.  ENKA Insaat ve

Aselsan Elektronik Sanayi

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aselsan Elektronik Sanayi are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Aselsan Elektronik demonstrated solid returns over the last few months and may actually be approaching a breakup point.

ENKA Insaat ve

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ENKA Insaat ve are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, ENKA Insaat is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Aselsan Elektronik and ENKA Insaat

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

The idea behind Aselsan Elektronik Sanayi and ENKA Insaat ve 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.

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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.