Correlation Between Bayrak EBT and Ford Otomotiv

Can any of the company-specific risk be diversified away by investing in both Bayrak EBT and Ford Otomotiv 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 Bayrak EBT and Ford Otomotiv into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bayrak EBT Taban and Ford Otomotiv Sanayi, you can compare the effects of market volatilities on Bayrak EBT and Ford Otomotiv 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 Bayrak EBT with a short position of Ford Otomotiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayrak EBT and Ford Otomotiv.

Diversification Opportunities for Bayrak EBT and Ford Otomotiv

-0.28

Correlation Coefficient

Bayrak EBT  Ford Otomotiv

Very good diversification

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

Pair Corralation between Bayrak EBT and Ford Otomotiv

Assuming the 90 days trading horizon Bayrak EBT Taban is expected to generate 1.6 times more return on investment than Ford Otomotiv. However, Bayrak EBT is 1.6 times more volatile than Ford Otomotiv Sanayi. It trades about 0.02 of its potential returns per unit of risk. Ford Otomotiv Sanayi is currently generating about -0.25 per unit of risk. If you would invest  1,783  in Bayrak EBT Taban on September 23, 2024 and sell it today you would earn a total of  8.00  from holding Bayrak EBT Taban or generate 0.45% return on investment over 90 days.

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

Bayrak EBT Taban  vs.  Ford Otomotiv Sanayi

Bayrak EBT Taban

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bayrak EBT Taban has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain 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.

Ford Otomotiv Sanayi

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ford Otomotiv Sanayi are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Ford Otomotiv may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Bayrak EBT and Ford Otomotiv

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

The idea behind Bayrak EBT Taban and Ford Otomotiv Sanayi 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.