Correlation Between Bms Birlesik and GSD Holding

Can any of the company-specific risk be diversified away by investing in both Bms Birlesik and GSD Holding 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 Bms Birlesik and GSD Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bms Birlesik Metal and GSD Holding AS, you can compare the effects of market volatilities on Bms Birlesik and GSD Holding 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 Bms Birlesik with a short position of GSD Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bms Birlesik and GSD Holding.

Diversification Opportunities for Bms Birlesik and GSD Holding

0.86

Correlation Coefficient

Bms Birlesik  GSD Holding

Very poor diversification

The 3 months correlation between Bms and GSD is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Bms Birlesik Metal and GSD Holding AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GSD Holding AS and Bms Birlesik 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 Bms Birlesik Metal are associated (or correlated) with GSD Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GSD Holding AS has no effect on the direction of Bms Birlesik i.e., Bms Birlesik and GSD Holding go up and down completely randomly.

Pair Corralation between Bms Birlesik and GSD Holding

Assuming the 90 days trading horizon Bms Birlesik Metal is expected to under-perform the GSD Holding. In addition to that, Bms Birlesik is 1.49 times more volatile than GSD Holding AS. It trades about -0.12 of its total potential returns per unit of risk. GSD Holding AS is currently generating about -0.07 per unit of volatility. If you would invest  391.00  in GSD Holding AS on September 23, 2024 and sell it today you would lose (9.00) from holding GSD Holding AS or give up 2.3% of portfolio value over 90 days.

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

Bms Birlesik Metal  vs.  GSD Holding AS

Bms Birlesik Metal

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bms Birlesik Metal are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Bms Birlesik demonstrated solid returns over the last few months and may actually be approaching a breakup point.

GSD Holding AS

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GSD Holding AS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, GSD Holding is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Bms Birlesik and GSD Holding

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

The idea behind Bms Birlesik Metal and GSD Holding AS 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.